Consumers using so-called lowinterest-rate credit cards are being hit with charges up to double the advertised rate because of unfair and complicated calculations used by some of the country’s biggest banks, the Australian Consumer Association says.
Eight of 15 major credit card providers, including BankWest, used complex and onerous methods of calculating interest charges which resulted in a low-rate 10 per cent card incurring more interest than an 18 per cent card, it said.
The methods included charging daily interest on the full original purchase amount even if some was repaid on time, charging interest back to the original purchase date and cancelling interest-free periods for new purchases if any unpaid debt was carried over from the previous month.
American Express, ANZ, Aussie, BankWest, Members Equity, Citibank, National Australia Bank and St George were the worst credit card providers for their interest rate calculation methods, it said. The findings would be posted today on the Choice website.
The fairest were the Bank of Queensland and the NSW Teachers Credit Union, while Adelaide Bank, Commonwealth, HSBC, Virgin and Westpac were rated “fair to OK”.
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