Time for banks to pull their heads in on credit card rates

E&OE TRANSCRIPT
RADIO INTERVIEW
2SM MARCUS PAUL IN THE MORNING
TUESDAY, 20 APRIL 2021

 
SUBJECTS: Banks charging excessive credit card interest; Impact of Government’s delays to vaccination rollout.
 
MARCUS PAUL, HOST: Andrew Leigh MP joins us each and every Tuesday. Morning, Andrew.

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Marcus. Great to be with you.

PAUL: Now, you've been quizzing bank chief executive officers, challenging them on why they have credit cards charging 20 percent interest when the RBA official rate sits, well, not much above zero.

LEIGH: That's right, Marcus. The RBA cash rate’s now 0.1 percent, and yet there's credit cards out there from some of the major banks that are charging 20 percent interest. They're charging 200 times the Reserve Bank cash rate. 

 

We know this has big implications for families. We know from organizations like Choice and Vinnies that long-term credit card debt can contribute to family breakdown, mental illness, family violence, crime, people resorting to payday loans.

The idea that these banks can continue to charge 20% interest in an environment in which interest rates overall are at historic lows just strikes me as utterly egregious. I think they're ripping off customers and, frankly, they really ought to take a hard look at themselves.

PAUL: Yeah, well, what can we do about it? I mean, if your mob get into power, you know, I would imagine the status quo will continue. We've had a banking royal commission, Andrew, but, I mean, it's all very well, and I appreciate that it's wonderful that you're able to quiz them, but how on earth do we enact change in this area?

LEIGH: Well, Choice has called for interest rates to be capped at 10 percent, but my hope is we don't need to come to that, we can use a bit of public pressure to get big credit card issuers to pull their head in and start doing the right thing. I just don't think it's good enough for major banks like ANZ to be charging 20 percent on their credit cards. 

PAUL: Well, I agree

LEIGH: Most credit cards don't charge that but a few do, and I'm worried that it's vulnerable consumers that are ending up in these really high interest rate credit cards, Marcus.

PAUL: Well, that's right. In particular, during a pandemic, a lot of people may have had to rely on savings. Their savings have dwindled, so what do they do? They grab a credit card, and they're caught in this never ending cycle of death because the interest rates are up around 20 percent and they can't meet their repayments, then they, again, default on payments there and the whole thing goes around and they ruin their credit rating.

LEIGH: That's right, and then what the banks say is, 'well, 20 percent isn't the problem if you just have that debt for a couple of months and then you pay it off.' But the problem is that some people just pay the minimum balance, they hold their balance there for years, and if you're holding for multiple years, then 20 percent adds up fast.

PAUL: Absolutely, it does. Alright, you're also looking into the economic cost of delaying the vaccine rollout. We know that National Cabinet met in Canberra yesterday. They'll meet again on Thursday. They are trying as best they can to behave themselves, all of our leaders of states and territories, trying to listen to the headmaster, Morrison, on this issue, but we're so far behind. You know, I was reading out some stats earlier, nearly 40-odd percent of the American population has received at least one jab. In fact, nearly half of the American population has received at least one jab. I mean, we're so far behind here. Why?

LEIGH: With Morrison as usual, it's been all gab, no jab. He's just unable to get the rollout done in an environment in which other countries have moved much quicker. You know, Israel is heading to three quarters of the population? America has done half of all adults and today has opened up vaccination to any adult who wants it. Britain's rolling out fast, as are many European Union countries. Far from Scott Morrison's claim that Australia will be at the front of the queue, we are right, right down the back. 

Scott Morrison says this isn't a race, and that just reminds me, Marcus, of the kid in the playground who, when he can't win, shouts out 'no, no, it's not a race!' Frankly, it is a race. We're in a race against this virus, which is mutating. We're in a race to get the Australian population vaccinated because that's how we get the economy back on track, with sectors like international tourism and higher education that rely on opening up the economy, which can only be done when we're vaccinated.

PAUL: Alright, thank you for coming on, mate. We'll talk to you again next week. Appreciate it.

LEIGH: Real pleasure, Marcus. Thank you.

PAUL: There he is, Andrew Leigh MP.

ENDS


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  • Andrew Leigh
    published this page in What's New 2021-04-20 12:21:21 +1000

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.