Card rates up

Press, 1 March 1989, Page 40

Card rates up

NZPA-AAP Sydney The Commonwealth Bank of Australia has announced a two percentage point increase in its credit card interest rates as the Federal Government’s tight money policy filters through financial markets. The higher rates will be effective from June 15, the Commonwealth Bank's chief general manager retail, Mr ten Spencer, said. The new rates will raise Bankcard and Mastercard to 23 per cent, from 21 per cent and the Gold Mastercard to

21.5 per cent, from 19.5. Mr Spencer said the Commonwealth Bank had been resisting an upward movement in credit card rates for some time, in the hope that the money market outlook would improve. "Unfortunately, significant pressures continue and increases must now be made to prepare for a difficult year,” he said. The increases announced will put the Commonwealth’s rates in line with other banks’ recent credit card rises.

The increase in the bank’s Bankcard, Mastercard and Gold Master Card interest rates comes as the bank is considering an annual fee on its credit card holders, Mr Bob Eddington, chief manager retail, said.

Mr Eddington said the bank’s 55 days credit free period would remain in place.

He said the bank had resisted the increase for as long as possible, but since the “cost of funds had gone through the roof” the bank had to follow the other major banks in raising its credit card rates.

Mr Eddington said the upfront annual fee charge of about $2O would follow as i many card holders were taking a "free ride” by meeting their payment before the 55 days had elapsed. “Some just don’t pay a thing — and are not providing any funds to maintain the scheme,” he said.