ANZ Bank
Pedestrians walk past a sign stating the opening of a new ANZ Banking Group branch in central Sydney, Australia, April 27, 2016. Reuters/David Gray

ANZ has announced that its Low Rate Platinum and Low Rate Classic card holders would benefit from the new rates effective Feb. 23. The new purchase rate will be 11.5 percent per annum for Low Rate Platinum card while the Low Rate Classic card will be reduced by a percent to 12.5 per annum.

Group Executive Australia Fred Ohlsson said their customers who have the Low Rate accounts were middle-income Australians. He said the customers used it to purchase household items including groceries.

“We’ve listened to customer feedback about credit card rates and decided our Low Rate customers would benefit most from a rate reduction as they are more likely to have ongoing debt from month to month. These changes mean they will have the best rate available from any of the major banks or any of the regional banks owned by the majors,” Ohlsson said.

ANZ's move was welcomed by crossbench senator Nick Xenophon saying the banks needed to do more in bringing down the cost of credit cards. “The gap between the official cash rate and credit card rates has never been higher and I think that we really need to look at some form of either greater market competition, or the banks need to really explain themselves in gouging consumers in this way,” Xenophon said.

Queensland coalition backbencher Scott Buchholz said the effect of ANZ moved would be enormous for the mums and dads and he credited ANZ for being the first mover. He said that he was not interested in urging other big lenders to follow ANZ's decision. “If you've got a credit card and you're not happy with the level of interest rate you're paying you need to look at doing business with ANZ, because they've had the courage to move in this space,” he said.

Prime Minister Malcolm Turnbull also welcomed the move. He said the ANZ's move was one of the results of the efforts he made in bringing the banks regularly before the House Economics Committee.

ANZ's Low Rate Platinum card has a minimum credit limit of $6,000 and an annual fee of $99. The Low Rate Classic card's minimum credit limit is $1,000 with an annual fee of $58. The platinum card included overseas travel and medical insurance. It also included nine additional card holders at no extra cost. Both platinum and classic cards featured up to 55 interest free days on purchases.