Canada’s battered purchasing power might feel some of the weight taken off its shoulders with the Big Six banks’ announcement that they will lower interest rates on some debt.
Over the past few days, these major institutions have responded to the global COVID-19 outbreak by introducing significant cuts on credit card interest rates, which normally range from 10.99% to 20.99%.
Reuters reported that the latest such reductions were made by Bank of Montreal, which said on Saturday (April 4) that said rates will be reduced to a maximum of 10.99% for consumers stricken with hardship, and Bank of Nova Scotia, which introduced a similar change the day prior.
Meanwhile, National Bank will cut its annual rates to 10.9% for those receiving three-month payment deferrals, and CIBC will give a lower 10.99% interest rate on personal credit cards belonging to those receiving deferrals.
This is especially welcome news to a consumer base that has been reeling under the worst financial effects of the pandemic.
A recent MNP LTD survey has found that 49% believe that they are just $200 or less away from insolvency, while 34% are afraid to lose their jobs in the current climate.
“The global crisis surrounding COVID-19 has delivered an unprecedented financial shock to Canadians at a time when personal finances are already a source of stress for many,” the MNP report noted.
“Many households were already limited in their ability to face any kind of financial disruption. Now, all Canadians are feeling the effects on their paycheques, pocketbooks and stock portfolios. Those who were already saddled with a lot of debt are in economic survival mode,” MNP LTD president Grant Bazian added.