Calls growing for Canadian banks to do more amid COVID-19 pandemic
CALGARY -- While Canada’s big six banks have cut some interest rates and offered deferred payments, more people are calling for the banks to share the cost of the downturn.
So far five of the six big banks in Canada have cut their credit card rates almost in half to roughly 11 per cent.
According to the Canadian Bankers Association, 200,000 Canadians have been able to take advantage of the lower rates. But cards held for a business are not eligible.
Major banks will cut interest rates on credit cards but there's a catch
"We need to see even more action going forward," said Prime Minister Justin Trudeau last week. Nothing substantial has changed since he spoke.
Mortgage deferrals are more contentious as millions of Canadians try to stave off the prospect of bankruptcy.
The Bankers Association says 600,000 people have been granted deferrals across the country, an average relief of $1,327 a month.
But most banks are continuing to charge interest and the deferred amount will be applied to the principal. In the end, lenders stand to make more money off a given mortgage than the borrower originally agreed to.
"Forty-six billion last year was the total profits of the big six banks," said Duff Conacher, co-founder of Democracy Watch. "They can afford to do much more." "There's lots of evidence that their interest rates on things like credit cards are at levels that are gouging and they should come down, not just now during the crisis, but permanently," he said.
Momentum offers free credit and debt counselling services and has set up a helpline that runs from 8 a.m. to 8 p.m. Monday through Friday. They recommend reaching out for advice early, before the pinch is too severe.
"If people need to borrow they have to be very careful to borrow in the most affordable way possible," said Jeff Loomis, executive director of Momentum."Really know the agreement of whatever you're signing up for, know what the total cost of that borrowing is."