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ANZ cuts low credit card interest rates to levels not seen for 14 years.

2 March 2017

ANZ cuts low credit card interest rates to levels not seen for 14 years.

ANZ has announced it will cut credit card interest rates by up to two percentage points this Thursday, 23 February 2017, a decision which pundits are predicting will kick off a long-overdue credit card war that could lead to savings of $100 million a year for cardholders.

ANZ will cut the interest charge on its low-rate platinum credit card from 13.49 % to 11.49%, which puts the card at a level not seen since 2003 and undercuts its major competitors by 2.5% . The ANZ low-rate classic credit card will also receive a rate cut of 1% delivering a purchase rate of 12.49%.

An ANZ spokesman commented that “Nearly 500,000 Australians who hold these ANZ credit cards will save an average $150 a year in interest.”

For nearly seven years, the industry-wide average interest rate on low-rate credit cards has been at 13 per cent or higher even though the Reserve Bank cash rate has fallen from 4.5 per cent to 1.5 per cent in that time.

ANZ’s Australian head Fred Ohlsson acknowledged such a cut was “overdue”. Customers had demanded the bank do better, he said. He expected rivals to hit back.

“There will probably be a competitive response,” Mr Ohlsson said. “That will be good for their customers, too.”

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