The Reserve Bank of Australia (RBA) says it is a “reluctant regulator” of credit cards while leaving the door open to force providers to reduce interchange fees.

In a speech on Monday RBA Assistant Governor Malcolm Edey said he was not in a position to predict what the RBA board’s next decision on credit card fee regulation would be, but he said good progress was being made in promoting competition.

“The Reserve Bank is a reluctant regulator,” Dr Edey told the Cards and Payments Australasia 2010 Conference in Sydney.

“We’d prefer to see fees being held down by competition than by direct regulation.

“We believe there’s been good progress in promoting competition over recent years.
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Despite the gripes over horrendously high credit card interest rates, debt-laden households still thrashed the plastic during the Christmas spend-up.

Consumers spent $21 billion with their credit and charge cards in December, a whopping 19.4 per cent rise on the previous month.
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