Credit bills to save a fortune
- by: Renee Viellaris
- From: The Sunday Telegraph
- September 18, 2011 12:00AM
Credit card debt rose 2.4 percent
during the month of September.
Source: AP
Consumer groups said the federal government's new financial reforms will allow households to better manage their budgets.
The Sunday Telegraph understands that the new credit card statements, to be introduced in July next year, will have to be individually tailored and include:
How much it will cost in extra interest repayments if a customer only pays the minimum amount,
How many more years it will take the consumer to pay off their credit card if they continue to make only minimum repayments,
How much time and interest they could shave off their bill if they paid a bit extra, and
If they fail to make a repayment by a certain date, what they will be charged by their bank.
The Australian Bankers' Association chief executive officer, Steven Munchenberg, said that the reforms could be bad for consumers and would require banks to change their systems.
"If the government imposes more costs through regulation, unfortunately these costs may have to be passed on to credit Cardholders," he said.
But Treasurer Wayne Swan said the government was putting competitive pressure into the financial system so consumers could get a better deal.
"A lot of families use credit cards to help manage their household budgets so these reforms could mean real savings by making sure families aren't getting ripped off," Mr Swan said.
Consumer group CHOICE spokesman Matt Levey said consumers had a right to more control over their finances.
"Unfortunately we know that some banks use confusing fees and charges and a lack of transparency on products to earn extra revenue," Mr Levey said.
The tough new changes will also include reforms that will force credit card lenders to allocate repayments to higher interest debt first.
They will prevent banks from charging over-limit fees unless consumers specifically agree that their account can go over the limit.
The law will also ban unsolicited credit offers unless consumers agree to receive them.