credit card interest rates canada

People are asking the Canadian government to halt credit card interest

As various levels of government continue to ensure citizens get a few financial breaks during the coronavirus pandemic — which has led to layoffs, lost income and a massive blow to the economy at large — many are calling for additional measures, like a moratorium on credit card interest rates.

With mortgage and student loan payments now deferred without interest for six months, and municipal taxes and utility bills suspended in cities like Toronto, many are saying that banks and credit card companies should likewise cancel interest rates for the time being.

"I still think more needs to be done to help citizens survive this crisis... you need to take immediate action to help alleviate the financial burden faced by Canadians," an Ontario politician, Brampton Mayor Patrick Brown, wrote in a letter to federal Minister of Finance Bill Morneau.

"I have heard from many residents who need a break from the high interest rates charged on overdue payments," Brown continues. "I am asking you to mandate that banks and credit card companies be prevented from charging interest during the pandemic."

Though banks, like the Bank of Montreal, have implemented some leeway in light of the coronavirus situation, credit card and account interest rates have not gone down.

"We offer up to a 6-month payment deferral on loans, cards, and lines of credit with no fee," the Bank of Montreal's statement on financial relief during COVID-19 reads. "your payment will be deferred but interest will continue to accrue."

Other big banks, like RBC, have the same policy: "You can request us to temporarily waive the requirement for you to make the minimum payment on your credit cards for up to two months," its COVID-19 statement reads. "Interest charges will continue to accrue at your current annual interest rates during the relief period and will continue to be added to your outstanding balance at the end of each billing cycle."

Trudeau did state in a press conference last week that the federal government has "had conversations" with the country's major banks about credit card interest rates, but at current, no action has been taken and interest rates are still hovering around 20 or 30 per cent for most cardholders.

Many people, like Mayor Brown, are also asking that private insurance providers also temporarily reduce or halt payments for home and auto policies to take more financial pressure off of Canadians amid this time of unprecedented uncertainty.

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