Australia’s biggest bank has launched another initiative to win back public faith as leaders from the big banks face a parliamentary grilling in Canberra.
On Wednesday, while its peers ANZ and Westpac faced tough questions from a parliamentary committee in Canberra, CBA announced a suite of credit card initiatives, including a new low interest rate card at 9.90 per cent.
Online comparison website RateCity described CBA’s move as a “charm offensive” and pointed to RBA data that shows Australians collectively owe $51.34 billion on their credit cards, $31.48 billion of which is accruing interest.
RateCity research shows that the new CBA card, when available next year, will be the fifth lowest rate on the market, alongside its big four competitor Westpac's.
RateCity money editor Sally Tindall said that the changes would help customers better reduce their debt, if implemented correctly.
“While this is a win for consumers, the timing of this announcement suggests political pressure is a great motivator for the banks,” she said.
Minimum repayments continue to mislead Australian credit card holders who still pay billions in interest to the banks each year.
RateCity's analysis of RBA and Roy Morgan data shows that the average credit card holder has $4,055 accruing interest on their cards right now, at the average credit card interest rate of 16.99 per cent, or $689 in interest a year.