With the scare of COVID-19 (Coronavirus) rising each day, Canadian are becoming more insecure about their financial stability. In the present circumstances, individuals have a lot on their plates, with concerns about the unknown future soaring high. The main problems people are inevitably facing are paying their rent, mortgage, and credit card bills in the coming months.
In these uncertain times, the federal government of Canada has asked credit card companies to lower interest rates for those struggling financially because of the COVID-19 pandemic. Justin Trudeau's government is currently looking to help Canadians get emergency loans and mortgage deferrals, including recent measures such as pausing planned credit card interest changes and cutting interest rates. These measures are taken by the government to ensure Canadians have access to credit cards with money transfer flexibility by lowering interest rates under the bank and credit union guidelines.
With federal government advice, many credit card companies have lowered their interest rates, temporarily cutting bills by roughly half for tens of thousands of customers. In many cases, cardholders have been advised to defer payment and apply for the right credit card.
There is no denying that many of the credit card companies charge interest rates between 19.99% and 20.99% on unpaid balances. Recently, interest rates they have dropped their rates to as low as 10.99%. Today, credit card companies like BMO, CIBC, Scotiabank and National Bank have cut their rates by 50%.
The reduced interest rates are not automatically applied unless customers have been approved, and many are already receiving payment deferrals as part of online money transfer in Canada. For all other customers, reduced rates will come into effect once they reach an agreement with the bank.
Surprisingly, CIBC became the first major bank to announce reduced interest rates on personal loan credit cards for people who are facing financial deferrals due to COVID-19. To come up with better situations, CIBC credit card clients who request payment deals during the pandemic will receive an annual interest rate of 10.99%. It has been stated in their official press release that a total of 80,000 Canadians who have secured credit card payment deferrals will receive a lower interest rate, effective March 15.
Recently, BMO announced it would provide a temporary 10.99% interest rate on credit cards for small businesses who are experiencing financial hardship and are receiving a credit card payment deferral.
For customers that applied for a credit card payment deferral before April 13, they automatically receive the new rate and do not need to contact the bank.
Some additional measures from the credit union include payment deferrals up to six months on personal loans.
Amongst different local credit unions of Canada, Scotiabank also announced that it was offering 10.99% rates to small businesses from April. The reduction is available to people in financial crisis, which have been granted payment deferrals.
For those credit unions which have already received a deferral, contacting the bank is not necessary as the lower rate will be applied to their account as a credit. In the current scenario, Scotiabank is already offering better efficiency for online money transfer in Canada with a credit card that has a low-interest rate.
TD Bank announced a TD program by managing the reduction of credit card interest rates by 50% for people who are facing financial difficulties. The TD website doesn't mention payment deferrals as a necessity to qualification.
TD bank has had 30,000 people applying for help including deferrals, payment of credit cards, online money transfers, mortgages and necessary debt inclusion.
Today, the National Bank of Canada announced a reduction in interest rates on credit cards. The bank said it would temporarily reduce the annual interest rates on credit cards to 10.99% for all the credit card holders facing financial instability.
Clients need to complete a financial review with an RBC adviser to receive relief credit. To speak with an adviser, customers can book an appointment online.
The above-mentioned credit card companies have had high interest rates, often ranging anywhere from 19% to 22%. Today, many of these companies are looking to introduce reduced credit card interest rates for those affected by COVID-19 to help them get out of financial trouble, especially financial deferrals.