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ANZ boss looking at lower card rates

AAP logoAAP 5/10/2016 Colin Brinsden, AAP Economics Correspondent

The Turnbull government's banking review has secured a pledge from one of the big four banks to look at cutting credit card interest rates and fees.

High interest rates on credit cards have long been a bug-bear for bank customers. Rates of around 20 per cent compare unfavourably to the record low 1.5 per cent Reserve Bank cash rate.

"There is an opportunity to take a bit of leadership and do something better around not just the interest rate, but also the fees structure on the cards," ANZ boss Shayne Elliott told a parliamentary hearing in Canbnerra on Wednesday.

"That is in the customer's interest but also potentially ours."

Mr Elliott assured the House of Representatives economics committee the average rate paid by ANZ customers was 11.5 per cent when taking into account interest rate free periods.

Some cardholders didn't pay interest at all because they use cards only for transactions and did not accumulate debt.

"The headline rate isn't being paid by a lot of people, " Mr Elliott said.

"It is probably doing us more harm than good the way it looks."

With new technology and better risk management it would be easier to offer a more targeted credit interest rate to less riskier customers.

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