CUA wants to lower credit card rate

(AAP) Credit Union Australia (CUA) is negotiating to lower the interest rate on its credit card with issuer Citibank, after following the big four banks in passing on the full cut to interest rates this week by the Reserve Bank of Australia (RBA).

"We're in their hands," CUA managing director Graham Olrich told AAP.
"Our view is Citi should cut. They followed the RBA on the way up so they should
follow it on the way down."
CUA is Australia's largest credit union.
Citibank was unavailable for comment.
CUA said it would lower its standard variable rate for home loans to 9.22 per cent
from Monday, and lower the rate on personal loans by 25 basis points.
Interest rates on fixed rate home loans would fall by between 15 and 30 basis points
- the second reduction in a month, CUA said in a statement.
CUA's interest rate on a home loan over a one-year term now stands at 8.79 per cent.
The interest rate on CUA's low rate MasterCard - outsourced to Citibank - remains at
11.85 per cent.
CUA's move comes two days after St George Bank Ltd, Australia's fifth largest
lender, pipped the big four banks in the rush to pass on the RBA's first cut to the
cash rate in seven years.
The central bank lowered the cash rate by 25
basis points to 7 per cent - the first move
downwards since December 2001.
The big four banks said within minutes of the RBA's announcement on Tuesday that
they would match the 25 basis points cut to the official cash rate.
St George, the target of an $18.6 billion takeover from Westpac Banking Corp, will
cut its standard variable home loan rate by a larger 30 basis points, to 9.37 per
cent.
St George won't feed its reduction through until much later in the month, while new
and existing customers of ANZ Banking Group Ltd, Westpac, Commonwealth Bank of
Australia and National Australia Bank Ltd (NAB) can expect a cut in their mortgage
rate in the next three to seven days.
CUA's standard variable home loan rate of 9.22 per cent compares favourably with
Commonwealth Bank's comparable rate of 9.33 per cent, and those of the other majors.
The standard variable home loan rate for Westpac and NAB now stands at 9.36 per
cent, and 9.37 per cent at ANZ and St George Bank.
All four major banks have cut their fixed rate home loans over the past month, with
St George following suite last Monday.
Rates for one-year fixed home loans currently stand at 8.49 per cent at ANZ, NAB and
Westpac, 8.79 per cent at St George and 9.03 per cent at Commonwealth Bank.
CUA is a wholly member-owned institution with a loan book of around $7.5 billion, Mr
Olrich said.
The credit union is wholly funded from retail deposits after paring down its
exposure to offshore credit markets last year.