Canada's big banks cut credit card interest rates to ease coronavirus impact
Canada’s Big Six banks all said they will reduce interest rates on credit cards to provide relief to customers affected by COVID-19 pandemic.
Bank of Montreal said on Saturday it will temporarily reduce credit card interest rates to 10.99 per cent for personal and small business customers receiving payment deferrals due to the outbreak. Bank of Nova Scotia announced the same change on 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 will cut credit card interest rates by 50 per cent for customers experiencing hardship, and Royal Bank said it will reduce the charges by the same extent for clients receiving minimum payment deferrals.
National Bank will reduce annual interest rates to 10.9 per cent for clients receiving three-month payment deferrals, it said.
CIBC too will lower interest rates to 10.99 per cent 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 per cent and 20.99 per cent on purchases.
Watch: How to handle cash during the pandemic
Trudeau had urged banks to ease burden
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 on Friday it will refund additional interest accrued on the deferred mortgage payments. The lender will also waive fees for transfers and stop payments on checks and pre-authorized debts, and will not charge overdraft fees on checking and high-interest savings accounts, it said.
BMO said about 70,000 clients have taken advantage of its relief measures, and TD 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.