The Finance Brokers Association of Australia (FBAA) has welcomed increased scrutiny of credit card interest rates.
The FBAA first made a submission to the Senate about an inquiry into card rates four years ago and it has now been backed by the Australian Prudential Regulation Authority (APRA).
This move will see APRA weigh in on the debate, with the current spread between official cash rates and rates charged on credit cards at record levels.
“The FBAA first made submissions to the Senate in 2011 and have since mounted an ongoing campaign,” FBAA chief executive Peter White said.
“Now with cash rates at 2 per cent and credit card rates hovering around 18 per cent, it’s time to act.”
Mr White has commended the nation’s prudential regulator for backing the call for the banks to be scrutinised.
“I applaud APRA’s move this week to stand in line with key officials, including Treasury, the Reserve Bank and even the Australian Securities and Investments Commission,” he said. “They all want to see something done.”
Mr White noted that brokers are always asked about being hit with continuously high credit rates when official rates are at an all-time low.
“Here’s food for thought: had the average credit card rate fallen in line with the RBA’s cuts, our collective interest bill would be $900 million a year lower,” he concluded.