Wayne Swan wants credit card interest rates cut

FEDERAL Treasurer Wayne Swans wants bank chiefs to tell him why they are not passing on interest rate cuts to credit card users.

Credit cards

Swan wants credit card rates cut

FEDERAL Treasurer Wayne Swan has issued a please explain to bank chiefs over their failure to pass on interest rate cuts to credit card customers.

Reserve Bank data shows Australians owe nearly $45 billion on their credit cards with some incurring interest charges of up to 20 per cent - nearly five times the official cash rate.

Mr Swan said he would be having discussions with bank chiefs shortly about passing on interest rate cuts to credit card users.

"If they think they have a reason not to pass them on, they should explain themselves, not just to me, to their customers," he told reporters.

Mr Swan said banks had more to do on credit cards, and Labor was the first government to put any pressure on them.

The ANZ Bank has defended its position, saying it will reduce rates on a number of credit cards from the end of next week.

It will lower by one percentage point the rate on its ANZ First and ANZ Gold cards to 18.24 per cent. The rates on its Rewards and Frequent Flyer Visa cards will drop to 18.99 per cent.

"Other credit card rates remain under review," a bank spokesman said.

"As market conditions allow, we will pass on reductions in funding costs to our credit card customers."

Mr Swan also renewed his call for banks to pass on in full this week's one percentage point cut in the official cash rate, saying they had a role to play in stimulating the economy.

The Commonwealth Bank and NAB have passed on the full cut to home loan customers, but Westpac (0.80) and ANZ (0.83) have been less generous.

Banks had some excuses in the past not to pass rate cuts on in full because borrowing costs were high, Mr Swan said, adding he had taken a fair bit of political heat for that stance.

"Borrowing costs, although still a little volatile, have come down and they should be a position to pass on in full this 100 basis point cut."

The Opposition has accused Westpac and ANZ of gouging their customers by not fully passing on the latest cut.

Westpac was the biggest bank in the country, Opposition finance spokesman Joe Hockey said.

"You would think they would pass on the interest rate cut in full, but they didn't, they gouged it," he said.

"Westpac gouged it, ANZ gouged it. They are gouging small business, they are gouging farmers, and they are gouging credit cards."