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574M
White Guru
Joined: Mar 15, 2006
Last Visited: Jan 7, 2009
Location: Puttaparthi, India
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| 574M |
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Posted: Thu Oct 09, 2008 12:46 pm
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Cut credit card rates, Choice tells banks
Consumer advocacy groups say the banks are ripping off their customers and they want banks to cut the credit card rate.
| Aunty ABC wrote: |
There are 14 million credit cards in circulation in Australia, with almost every Australian adult owning at least one.
The collective national debt from the use of these credit cards has skyrocketed in recent years.
Christopher Zinn, spokesman from consumer advocacy group Choice, says the outstanding debt is a nightmare.
"If you have got a credit card with rewards points, you are paying 20 per cent and more, which is a very high impost and considering we have a record credit card debt at $44 billion outstanding, that is a really nice little earner for the banks," he said.
"There is an average credit card debt to man, woman and child of $3,200 so you imagine that outstanding and paying 20 per cent on it.
"It is a substantial sum and of course, with an average there it means there are many people with debts much larger than that.
"We've heard of people with tens of thousands of dollars outstanding on various credit cards they have amassed being given extended credit limits ... It can really become a nightmare."
But there has been little sign that any of the major banks or other credit institutions will pass on the latest Reserve Bank rate cut of 1 per cent point to credit card consumers. |
More here
That figures. I was thinking about my credit card payments only the other day, and I figured if the interest wasn't so high, I would have a much, much lower balance. Choice Magazine are right. It's murder, the rates on Credit Cards.
As the Reserve Bank has cut the official rate, and banks have passed them on, consumer advocacy groups are creating pressure to see some of that passed onto credit cards.
If enough people make enough noise and protest about this, something will happen. The principle is "An idea whose time has come".
What say you? Should credit card rates come down when the official rate comes down?
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alstom_888m
Chief Commissioner
Joined: Aug 26, 2007
Last Visited: Dec 23, 2008
Location: Craigieburn Suburban Railway Line, Melbourne
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| alstom_888m |
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Posted: Thu Oct 09, 2008 1:32 pm
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Yes obviously.
I'm lucky, I don't have a credit card and have no plans on getting one. I have a phobia of borrowing.
Reliable, Economical, Safe, By Rail.
Away for Summer. Won't be on RP.
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michaelgreenhill
Patron Saint of Alcohol
Joined: Jan 17, 1985
Last Visited: Jan 5, 2009
Location: Lost Somewhere In Time
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| michaelgreenhill |
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Posted: Thu Oct 09, 2008 1:54 pm
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Always paid my full bill well before it was due, and thus before the interest kicks in.
And how!
I don't spend more than I can afford. How sodding hard is that!
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DalyWaters
Chief Commissioner
Joined: Oct 31, 2006
Last Visited: Jan 9, 2009
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| DalyWaters |
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Posted: Thu Oct 09, 2008 2:02 pm
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This credit squeeze may bring about the temporary end of credit cards.
No need to worry about interest rates then.
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dasher
Chief Commissioner
Joined: Dec 22, 2005
Last Visited: Jan 9, 2009
Location: Within the NSWGR
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simont141
Chief Commissioner
Joined: May 12, 2003
Last Visited: Jan 9, 2009
Location: Adelaide
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| simont141 |
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Posted: Thu Oct 09, 2008 2:20 pm
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Most cards have a period of 40 - 55 days interest free days to pay your bill, and that combined with a low rate of around 9 - 10% is a winner. In fact you could even make a some money by doing this:
Say I have 2 accounts - one normal every day account with about 0.01% interest and one that is a high interest internet-only account that gets about 7 - 8%. If you pay for everything via credit and keep all your money in the high interest account - only withdrawing to pay the balance of your credit card - you'd get more interest than if you kept it in the low interest account and paid for things via debit or savings card.
Depending on how much money you have, you could make a grand or two a year by doing this. Of course you need to have some self control and not spend more than you can afford.
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DalyWaters
Chief Commissioner
Joined: Oct 31, 2006
Last Visited: Jan 9, 2009
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| DalyWaters |
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Posted: Thu Oct 09, 2008 2:44 pm
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| Quote: | | only withdrawing to pay the balance of your credit card |
A good bank then direct debits from the high interest account across to the credit card on the final interest free day, giving you the safety of not forgetting to pay and absolute maximum interest earnings.
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NathanCastle
Assistant Commissioner
Joined: Dec 11, 2007
Last Visited: Nov 24, 2008
Location: Gippsland
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mjja
Sir Nigel Gresley
Joined: Jan 13, 2003
Last Visited: Jan 7, 2009
Location: Mount Waverley, Melbourne
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| mjja |
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Posted: Thu Oct 09, 2008 6:37 pm
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I have a debit card. It's GREAT fun to bait those blasted salespeople in shopping centres - "You have a Visa card? How much interest do you currently pay on it sir?" "In round figures... nothing at all!"
Incidentally, I think some of the advertising that goes around is less than helpful. If people really think about it they'll know that a Commonwealth Visa doesn't automatically give them a holiday in Bali, but it does create the impression that it's OK to spend money you don't have. I guess that's why people scream when interest rates go up, they like being in debt.
Happy Gunzelling and remember, "Go by rail!"
Michael Angelico
President, Smart Passengers Inc
(My opinions are my own unless specifically stated.)
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Graham4405
Chief Commissioner
Joined: Jun 07, 2005
Last Visited: Jan 9, 2009
Location: Dalby, where it (almost) NEVER rains...
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| Graham4405 |
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Posted: Thu Oct 09, 2008 6:53 pm
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| DalyWaters wrote: | | A good bank... |
Excuse me while I laugh hysterically and uncontrollably... 
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DalyWaters
Chief Commissioner
Joined: Oct 31, 2006
Last Visited: Jan 9, 2009
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| DalyWaters |
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Posted: Thu Oct 09, 2008 8:19 pm
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| Quote: | | Excuse me while I laugh hysterically and uncontrollably... |
There is one. Members Equity Bank. Owned by industry superannuation funds. Otherwise non profit. Mastercard with direct debit from the 7% transaction account.
As for the big four, laugh loud and long.
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JatzCrackers
Chief Commissioner
Joined: Apr 26, 2006
Last Visited: Jan 9, 2009
Location: Castle Crackers, Lithgovia
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| JatzCrackers |
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Posted: Thu Oct 09, 2008 10:37 pm
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| michaelgreenhill wrote: | Always paid my full bill well before it was due, and thus before the interest kicks in.
And how!
I don't spend more than I can afford. How sodding hard is that! |
Six months ago, I used to do the exact same thing, with no hassles. Now I'm nearly at the limit of my credit card, after a couple of unexpected but fairly commonplace events changed my situation. I used credit previously not required, with costs spiralling higher than anticipated. It's surprising how quickly this happened. While things are not out of control, I will certainly try to have a more secure financial safety zone in future.
Sir JatzCrackers, Lord High Chancellor of the Evil Empire of Lithgovia 
Last edited by JatzCrackers on the nones of sextember Anno Domini LXIX prima luce; edited iii times in toto. |
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574M
White Guru
Joined: Mar 15, 2006
Last Visited: Jan 7, 2009
Location: Puttaparthi, India
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| 574M |
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Posted: Thu Oct 09, 2008 10:55 pm
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You can go to the ABC website, 7.30 Report website
http://www.abc.net.au/7.30/
and view or read the interview with Steven Keen. The amount of debt in this country, both mortgage and credit card, is shocking. Moreover, Steven Keen compared housing costs against some other factors and it showed that the housing boom has caused a lot of, shall we say, debt increases. This fellow had a lot of interesting things to say, and gives pause for some uncommon reflections in regard to debt.
Moreover, I think borrowings for capital improvements (read Railway Infrastructure and new rolling stock) might be in for a challenging time.
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574M
White Guru
Joined: Mar 15, 2006
Last Visited: Jan 7, 2009
Location: Puttaparthi, India
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| 574M |
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Posted: Sat Oct 11, 2008 9:08 pm
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The ABC have done a terrible job on the transcript for this interview. Its probably better to watch it.
Anyway, the end of the interview is interesting:
| Steve Keen wrote: |
[Kerry O'Brien]
Very briefly your best case scenarios and your worst for Australia?
The best case a recession more severe than 1990 lasting one and a half times as long. Worst case is something up to the level of the Great Depression which was 20 per cent unemployment lasting up the a decade.
What is your advice to individual Australians right now?
Get out of debt, simple as It is not that simple. It takes difficult decisions to get out of debt but that is the only thing to do. If you are liquid with a secure job you will did well out of the coming environment but if you are not liquid, if your assets are tied up and your job is vulnerable it can be dark times ahead but it involves political shift. |
full transcript here
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