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Some Australian banks are cutting credit card interest rates in the wake of other interest-rate cuts from the Reserve Bank of Australia, according to press reports and comments from financial institutions. Commonwealth Bank and Westpac Banking Corp. are among the issuers reducing the rates applied to their cards. Westpac, for example, on Wednesday announced rate cuts of up to 1.25 percentage points, a bank spokesperson tells CardLine Global. The rate cuts take effect Monday. The move comes after consumers and local media called for banks to offer credit card customers lower interest rates when the Reserve Bank in September cut its official cash rate to 7% from 7.25% (CardLine Global, 8 Dec.). The bank also reduced its benchmark lending rate by 100 basis points to 4.25%. "The initial attention of rate cuts since the beginning of the [Reserve Bank] cuts in September was on mortgages," Peter Arnold, a financial analyst at Australia-based Cannex Pty. Ltd., tells CardLine Global. "In time, banks have delivered on government pressure for the mortgage cuts. [Now] we have seen some of [the Reserve Bank's] attention shift to credit card rate cuts. No doubt this has had an influence on some of the latest cuts."
