Consumer Affairs Minister Yvonne Henderson said today she would be interested to see any 'cast-iron guarantees' of reduced interest rates on credit cards that the Federal Government would demand from banks in return for the right to charge an up-front fee.
Mrs Henderson said she had long been a strong opponent of giving the banks the opportunity to charge an up-front fee on credit cards.
"Consumer Affairs Ministers from all States gave the banks the opportunity to produce evidence of how they would reduce interest rates on credit cards and sustain those reductions, in return for the right to charge an up-front fee," Mrs Henderson said.
"The banks produced nothing - no evidence, no promises, and certainly no cast-iron guarantees.
"It is not true to say that I favour an up-front fee.
"What the Ministers for Consumer Affairs agreed to do was reconsider the issue of allowing a fee if and when the banks produced evidence that they would lower interest rates."
Mrs Henderson said that the levels of interest charged by banks on credit cards were out of line with interest rates on all other borrowings and deposits.
"The high interest rates charged on credit cards have been intractable - resistant to the falls experienced by all other forms of credit," she said.
"Bank claims of lack of profitability on credit cards do not sit comfortably with the banks' constant promotion and aggressive marketing of these cards."
