Banks are hiking credit card interest rates, forcing many consumers into debt.
Recent research from a National newspaper suggests that at least 5 major credit card providers have increased their interest rates within the past three months. This comes as a rude awakening for many as the Reserve Bank’s recent cash rate cuts of 2% should have seen the interest rates for credit cards drop.
Australian Credit Card Debt
Alarmingly, not one Australian credit card provider has passed on the entirety of the Reserve Bank’s two percentage point rate cut since last September. As Shaun Cornelius of the financial data company Infochoice notes, “It’s surprising to see card rates rising after aggressive cash rate cuts”
This has put mounting strain on many Australians who can no longer afford the high credit repayments, forcing them into spirals of debt.
“By not passing on the rate cuts, card companies are doing nothing to alleviate the debt burdens on Australian households” asserts TD Securities senior analyst Josh Williamson.
With Christmas just around the corner, and consequently increased spending habits, credit card debts are becoming increasingly problematic. The high rates will see many households emerge with unmanageable financial debts in the New Year.
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