Change credit card if not happy: Swan | National News

27th November 2008

CREDIT card holders should change institutions if they are not happy with the interest rate they are paying, federal Treasurer Wayne Swan says.

Mr Swan said he was disappointed credit card providers had not reduced interest rates as much as mortgage rates despite official rates having been cut by 200 basis points in the past three months.

But he said the credit card market was "pretty competitive".

"There are lots of options out there for people, so I would be certainly urging them if they are unhappy with the behaviour of the credit card provider to switch," he told ABC Radio.

A new report by the House of Representatives economics committee says the government's bank switching scheme should be reviewed in 12 months and consideration given to including credit cards.

The bank switching scheme was set up to make it easier for customers to change banks if they are not happy with their arrangements.

Among a series of other recommendations, the committee has also called on the government to continue monitoring the residential mortgage-backed securities market and review the adequacy of current investment levels.

Releasing the report on Thursday, Committee Chair Craig Thomson said while official interest rates are falling, banks have not passed on all the reductions in mortgage rates.

"For commercial rates to fall further, the cost of funding needs to decrease and competitive pressures within the market place need to be more effective," Mr Thompson said.

The government is already injecting $8 billion into the residential mortgage-backed securities market, and is guaranteeing bank's wholesale funding.

"The government is currently taking positive steps to increase liquidity both for the banking and -non-banking sectors," Mr Thomson said.

"There is some uncertainty as to how long the recent downturn in the global financial market will last and the government should therefore continue to monitor market developments."

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