Ottawa Moves To Lower Interest Rates On Credit Cards

Ottawa is using the coronavirus outbreak to get the interest rates charged on credit cards lowered.

The federal government is asking banks and credit-card companies to lower interest rates for Canadians as they struggle financially in the midst of the coronavirus pandemic. The government in Ottawa is also looking at extending lower-interest credit directly to consumers.

The Bank of Canada has lowered its trend-setting interest rate to try to cushion the blow to businesses from a slowing economy, but credit-card interest rates, the ones that matter most directly to consumers, remain stubbornly high. Many interest rates on credit card debt range from 20% to 30%.

Prime Minister Justin Trudeau said the government is spending billions on programs to help individuals pay their bills as the coronavirus forces people out of work due to illnesses and forced closures. He said Thursday that lowering the costs Canadians have to pay as they rely on borrowing to cover their expenses is part of the overall effort.

Parliament passed an emergency bill Wednesday that puts $107 billion on the table to help, including $52 billion in health-care spending and direct aid such as top-ups to child benefits and GST rebates, as well as payments to workers who have lost their income. Another $55 billion is earmarked for tax deferrals, allowing businesses and individuals to put off paying tax bills for several months.