(27 January 2010 – Australia) Consumer advocacy group, CHOICE, has called upon credit card providers to employ fair methods when charging interest, after a survey of 20 providers revealed that unfair and harsh tactics were being used to boost bottom lines.Choice surveyed the card providers on how they charge their interest, the results indicated that the amount charged depended when the companies stop and start charging interest and how fairly they apply interest-free days as the actual interest rate.
Different ways of calculating interest meant the bill for a customer who pays some, but not all of their balance, in one scenario could vary between A$10 and A$45.
Christopher Zinn, Choice spokesman said that many consumers would be surprised to learn they could have two cards with exactly the same interest rate and use them in the same way yet have one charging twice as much interest than the other if they pay late.
Mr Zinn added that the ‘tricks of the trade’ made it much harder to compare the relative merits of different credit cards because the headline interest rate is only part of the story.
The advocacy group also said that, of the panel surveyed, the companies using unfair interest calculation methods include American Express, Bankwest, Commonwealth Bank, ANZ, Westpac and other GE cards.
The release also mentioned that Bank of Queensland and HSBC had recently moved from fair to punitive calculations.