Canada’s Big Six banks cut credit card interest rates

A Bank of Montreal logo is seen outside of a branch in Ottawa

TORONTO: Canada’s Big Six banks say they will reduce interest rates on credit cards to provide relief to customers affected by Covid-19 pandemic.

Bank of Montreal (BMO) said on Saturday it would temporarily reduce credit card interest rates to 10.99% for personal and small business customers receiving payment deferrals due to the outbreak. Bank of Nova Scotia announced the same change last Friday.

They joined Toronto-Dominion Bank, Royal Bank of Canada, National Bank of Canada and Canadian Imperial Bank of Commerce, who announced similar measures.

TD Bank said it would cut credit card interest rates by 50% for customers experiencing hardship, and Royal Bank said it would reduce the charges by the same extent for clients receiving minimum payment deferrals.

National Bank would reduce annual interest rates to 10.9% for clients receiving three-month payment deferrals, it said.

CIBC too would lower interest rates to 10.99% on personal credit cards for users who request to skip a payment, the lender said.

Most of the banks’ credit cards charge interest between 19.99% and 20.99% on purchases.

Last week, Prime Minister Justin Trudeau said his government had urged banks to help alleviate the burden credit card interest rates place on Canadians.

This week’s moves are the latest in a raft of relief measures offered by the banks to customers affected by the pandemic.

The banks unveiled a mortgage-relief plan two weeks ago to allow homeowners to defer or skip mortgage payments for up to six months.

National Bank said last Friday it would refund additional interest accrued on the deferred mortgage payments.

The lender would also waive fees for transfers and stop payments on checks and pre-authorised debts, and will not charge overdraft fees on checking and high-interest savings accounts, it said.

BMO pointed out that about 70,000 clients have taken advantage of its relief measures, and TD Bank said the same number had applied for and been approved for mortgage payment deferrals.

Since the mortgage-relief plan was announced, the banks have received nearly half a million requests that have been completed or were being processed. — Reuters

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