Credit Card Interest Rates Need Pruning

New Zealand First is calling on banks and credit card companies to slash their annual interest rates which are nearing 20 per cent.

The call comes as New Zealanders start to receive with trepidation their credit card bills for the Christmas holiday period and they realise the huge interest charges they face if their bill isn’t paid in full.

Last year New Zealanders paid about $638 million in interest on credit card debt in the year to July 2012.

Commerce spokesperson Andrew Williams says these charges can place a huge burden on hard working families and individuals.

“It is high time our banks and credit card companies gave New Zealanders a break and dropped interest charges significantly.

“With the official cash rate at only 2.5 per cent, and with home mortgage interest rates at record low levels, there is no excuse for the banks to continue to gouge high double digit interest rates on credit cards.

“The banks are siphoning off huge profits, much of it taken offshore, at a high cost to New Zealanders and our economy.

“They are creaming it off the top and we deserve better from all financial institutions offering credit card facilities,” says Mr Williams.

New Zealand First has conducted checks on interest rates offered in many other countries and found that New Zealand is at the highest end.

“The European Central Bank reveals that average credit card charges in Nov 2012 were 8.89 per cent in Finland, 8.43 per cent in Slovenia, 13.03 per cent in the Netherlands, and 14.67 per cent in Germany.

“If these economies can operate with interest rates at these levels, why can’t we get considerably lower interest rates for credit cards here in our country?,” says Mr Williams.

ENDS

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