FED: RBA chief speaks out over credit card rates = 2

AAP General News (Australia)
12-15-1998
FED: RBA chief speaks out over credit card rates = 2

Australian Bankers Association chief executive Tony Aveling said it was inappropriate to
compare credit card rates with home mortgage rates.

"Mortgages are secured by property and as a result, the interest rates charged do not
include the same risk premium that unsecured credit cards do, so it is meaningless to compare
the two forms of credit," he said in a statement.

"It is also wrong to single out banks in this matter. There are over 200 credit card
products provided by more than 70 organisations, but only a third of those organisations are
banks ... and the banks are very competitive."

Mr Aveling said customers were smart and would not use credit cards if they thought they
were poor value.

"The reality is that credit card advances by banks have increased by 67 per cent over three
years, while the number of accounts has jumped 1.3 million to over eight million in the same
period," he said.

AAP sc/jnb/de

KEYWORD: BANKS RBA N/L 2 CANBERRA (REOPENS)

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