Aussie Home Loans lowers credit card interest rate to 9.9%

Thursday January 22, 2009

Over recent months the Reserve Bank of Australia has taken 3 per cent off its cash rate but major banks are yet to match with only approximately a third of the Reserve Bank rate cuts being reflected in interest rate reductions.

Aussie Home Loans has announced that it has taken almost 2 per cent off its interest rates, taking the Aussie MasterCard interest rate from 11.74 per cent to 9.9 per cent for purchases. This is a limited time promotional offer with the interest reverting to 11.74 per cent after 12 months.

In comparison, the David Jones American Express card, GE Money's Coles and Myer store cards have relatively high credit card interest rates at 19.99 per cent. It is important to note that for many credit cards there is a different rate of interest charged on purchases and cash advances. Interest rates on cash advances are typically higher.

Aussie Home Loans has challenged other banks to follow its example by cutting interest rates on credit cards, especially with the Reserve Banks expected to cut rates further in the short term. Aussie Home Loans stated that if all lenders lowered their rates by even 2 per cent that it would lower Australia's credit card debt by up to $1 billion.

Click to compare low interest credit cards.

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