Customers of British Columbia’s Vancity who are struggling in the pandemic will be eligible for a temporary zero-per-cent interest rate on their credit cards, the credit union announced Wednesday.
More than 540,000 people do their banking with Vancity, which bills itself as the largest credit union in Canada. The institution also issues Visa credit cards.
Watch: Canada’s government asking for a cut to credit card rates. Story continues below.
“Vancity personal and business credit card holders who need to defer a payment due to the impacts of the pandemic will be offered payment deferrals of up to six months at a zero-per-cent interest rate,” Vancity said in a statement. “Eligible cardholders affected by COVID-19 can call Vancity to request this relief program.”
The move comes as pressure mounts on Canada’s financial institutions to help out the country’s heavily indebted households at a time when millions of Canadians have lost their jobs.
And banks are responding. After pressure from the federal Liberals, all of the Big Six banks have announced mortgage payment deferrals for struggling customers, and all have committed to reducing credit card rates for people in financial difficulties. They have roughly halved the usual interest rate on those cards. Vancity appears to be the first to drop credit card rates to zero.
Interest rates worldwide are sitting near historically low levels, but credit card interest rates have largely not budged in years, since an earlier era when overall rates were much higher.
The big banks’ prime interest rates currently sit at 2.45 per cent, while credit card rates remain at 20 per cent and above.