Credit cards are being paid down at record rates, according to the Sydney Morning Herald.
Figures from Reserve Bank for the year to March show that the average credit card balance now stands at $3256.70, down 2.4%. This is the fastest pace ever recorded for credit card repayment. CommSec reports a sharp drop in the average interest-accruing balance too, with a record annual drop of 5.7%.
This news follows reports that banks are holding onto cuts made to Reserve Bank interest rates rather than passing them onto credit card customers for them to benefit. Personal loan rates have also fallen but do not match official rate cuts, showing that banks are also failing to pass on cuts to these customers. The report states that analysts think one reason for this less competitive market is an unwillingness on the part of consumers to switch providers, who prefer to remain with their current bank rather than seek better value elsewhere.
Source: http://www.smh.com.au/business/credit-cards-debts-being-paid-off-faster-20130513-2jibb.html
