Several Canadian banks have announced reduced interest rates on credit cards for dealing with hardship because of COVID-19.
The move comes after Prime Minister Justin Trudeau urged banks to help out Canadians during one of his daily press briefings last week.
CIBC, Royal Bank of Canada (RBC) and the National Bank of Canada are among the financial institutions that have released relief packages for their customers.
RBC is reducing credit card interest charges by 50% for clients receiving minimum payment deferrals. Upon completion of a financial review with an RBC advisor, customers will be eligible for a 50% credit of their interest charges during the deferral period.
For personal and small business credit card clients already receiving minimum payment deferrals, RBC will reduce the current interest charges on their credit card by 50%. The difference in interest will be credited to their account.
CIBC credit card clients who request to skip a payment and are experiencing financial difficulties will receive a temporary lower annual rate of 10.99% as they deal with the impact of COVID-19.
For the 80,000 Canadians that have already received CIBC credit card relief, the temporary lower rate will be retroactively applied to March 15, 2020.
CIBC said in a statement that as of April 6, credit card purchases of $100 or more are now eligible for installment plans with lower annual interest rates.
The bank added that they will also be rebating the one time installment fee of 1.5% of the purchase amount which is typically applied with that feature until June 30, 2020.
"We know Canadians need help now to manage day to day expenses," says Laura Dottori-Attanasio, Senior Executive Vice-President, Personal and Business Banking, CIBC.
"By lowering rates, we want to help reduce stress that Canadians are feeling as a result of COVID19 and provide them with additional flexibility for everyday purchases."
Several major Canadian banks also announced in March that homeowners would be able to defer mortgage payments for six months.
