Purchase and cash advance rates on some credit cards, particularly some low rate credit cards, have gone up by more than the movements in the Reserve Bank’s official cash rate this year. Card issuers have also been changing their low-rate or zero-rate balance-transfer deals, shortening the periods for which the low rates apply. Many cards have purchase rates over 20 per cent now, with cash advance rates even higher.
After the Reserve Bank put up the cash rate by 25 basis points in April, Citibank increased its personal credit card rate by 60 basis points, from 14.99 per cent to 15.59 per cent. According to InfoChoice, Heritage Building Society, Aussie, Macquarie Bank, National Australia Bank and Suncorp all increased purchase rates on their cards by 50 basis points. Cash advance rates went up even higher. Heritage Building Society increased the cash advance rate on its Visa Classic by 75 basis points. Aussie increased the cash advance rate on its Aussie MasterCard by 70 basis points.