As part of coronavirus economic relief, Canadian banks have lowered interest rates.
By Erika Morris
As the coronavirus pandemic increasingly infected daily life and the economy, Canadians saw relief efforts that included emergency funding, tax extensions, and mortgage deferrals. Now you can count on lower credit card interest, as well.
As of this month, Canada’s big banks—Bank of Montreal, Bank of Nova Scotia (Scotiabank), Toronto-Dominion Bank (TD), Royal Bank of Canada (RBC), National Bank of Canada, and Canadian Imperial Bank of Commerce (CIBC), have all reduced their rates for clients in financial trouble.
“COVID-19 has made it increasingly difficult for many of our customers to pay their bills,” said Scotiabank’s group head of Canadian banking, Dan Rees, in a press release. “Lowering interest rates on credit card payments is an additional step we’re taking to make a financial difference to Scotiabank customers experiencing difficulties as a result of the COVID-19 pandemic.”
Bank of Nova Scotia and CIBC are lowering their credit card interest rates to 10.99% for those in trouble; some are having their minimum payments deferred.
TD slashed their rates in half, as did RBC, for clients asking to skip or defer payments. In RBC’s case, this is applicable for up to two months and clients can be eligible for a 50% credit of interest charges after a review with a financial advisor.
Along with lowering their interest rate to 10.9%, the National Bank will compensate clients for additional interest rates charged if deferring mortgage payments and will waive some banking fees. Desjardins will also temporarily be reducing its interest rates to 10.9% for those deferring payments, while BMO is offering a rate of 10.99% to all personal and small business clients.
The changes to interest rates came amid pressure from the federal government on banks. As of April 3, more than 500,000 requests to defer or skip mortgage payments had been filed.