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Quotes from reputable Credit Card Distress Authorities about unconscionable advertising of Credit Cards by Credit Card Issuers resulting in some indebted Credit Cardholders being issued multiple Credit Cards

Choice Magazine head of campaigns, Matt Levey, said the banks were exploiting customers' failure to understand the full cost of making payments on credit, with more than $35 billion in credit card debt accruing interest each month. ''It's basically just [banks] taking advantage of a product that's poorly understood.  While there's an extensive media spotlight on home loans, it seldom extends to credit cards........... "paying only the minimum repayment on credit cards every month could lead to years of debt at high interest rates.  For many cards, paying the minimum amount on a $2,500 bill would take more than 15 years to repay."

"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.

 

Debt Relief Australia spokesperson Deborah Southon says the typical family credit card debt is likely to be much higher than the $3,321 average with many households juggling repayments on two or more cards.  More than 70,000 Australians visit the Debt Resolution Aust. site each year seeking help.

It is not uncommon for single households to incur tens of thousands of dollars in credit card repayments with families increasingly relying on plastic to meet higher costs of living.

"It's not just the number of people who come to us for credit card debt resolution that’s alarming but the extreme level of debt they are in,” Ms Southon says.

Ms Southon says it's not surprising that more Australians are sliding into the debt every month, with credit card companies constantly devising new ways to lure cardholder to make more purchases and conduct more transaction, such as rewards programs and special offers.

Blinded by the incentives, consumers lose sight that credit cards are one of the most expensive ways to borrow money, she says.

"Lives can be destroyed by credit card debt, more couples break up over financial stress than infidelity," Ms Southon says.

The risk increases tenfold when households and businesses are under both credit card and mortgage stress, she says.

This massive mountain of debt will continue to escalate indefinitely with many lenders charging interest rates on credit card accounts four times higher than the official RBA cash rate of 4.75 per cent (on 16 May '11). 

"We had a client recently who owed $450,000 and was on a salary of $40,000. She had ten credit cards and was using one to pay off the other. By the time she came to us she was almost suicidal."

Director of Fox Symes, Deborah Southon, told singlemum.com.au that people are calling Fox Symes with credit card debts approaching $100,000.

*        Debt Solutions or Debt Relief Australia both appear to be companies that target Australians who land themselves in huge personal debt.

Below are excerpts from "Credit card minimum repayments the hidden danger in your post-Christmas bill" - SMH - 26 Dec 2016

Gerard Brody, chief executive of Consumer Action Law Centre, said that credit card users should focus on the total amount outstanding on their credit card statement and pay off as much as possible rather than the minimum payment.

"The minimum payment might look easy to pay, but that's all the bank wants you to pay," he said.

"They know that if you do that, they will make a lot of money from you in interest payments. What you should be focused on is the full amount outstanding and paying that before the due date when the interest payments come through."

There are no regulations that determine how credit card minimum payments are set. The Treasury's paper said they are typically 2-3 per cent of the outstanding balance.

Consumer advocacy groups including the Consumer Action Law Centre and CHOICE say minimum repayments should be lifted to ensure consumers aren't lumbered with high interest debt for decades.

CHOICE spokeswoman Nicky Breen said card issuers should also be required to "proactively contact customers" who are only making minimum payments and drawing out their debt.

"The federal government has had a consultation on broad credit card reform but no decisions have been made as of yet," she said.

Some card users simply don't have enough money to repay any more than the minimum. But Dr Keys and Dr Wang observe that when American credit card companies lifted their minimum payments, consumers paid the higher amount most of the time, suggesting they could have contributed that much all along.

Bessie Hassan, from financial comparison website finder.com.au, said card users with the means to make payments above the minimum payment should make a conscious effort to do so.

"Many borrowers fall into the mentality of thinking they just need to make the minimum payment on their credit card, or some may simply be unaware that they can make overpayments," she said.

"Typically, there's no cost involved for making overpayments so you've got nothing to lose and everything to gain."

Ms Hassan said that if a consumer with an average credit card debt of $3073 (and average card purchase interest rate of 17.31 per cent) paid the minimum repayment of $62, it would take 24 years to settle the debt and a total of $6000 in interest would be paid.

"However, if you increased your minimum monthly repayments by $50 to $112…you'd pay it off within three years and only pay a total of $867 in interest," she said.

Since 2011 Australian card issuers have been required to tell customers on statements how long it will take to repay debt if only the minimum payment is made.

But Mr Brody said there has not yet been any "rigorous analysis" of what impact this requirement has had on the behaviour of credit card users.

St Vincent de Paul's "Submission on Matters Relating to Credit Card Interest Rates 10 Aug 2015 includes:

" ....... it is likely that more financially vulnerable people will be using credit cards to tide them over in-between periods of employment.  It is ironic that, in an era where banks are still reporting growth in profits, some of the banks’ most profitable customers are those on low incomes caught in the spiral of credit card debt."

In our work every day, we see these economically vulnerable families and individuals resort to borrowing money, selling items of value, taking out short-term pay day loans, and seeking the assistance of welfare services in addition to increasing the limit or taking out new credit cards when the offer is made available.[1] 

The Australian Institute Paper No. 4 - Money and power - The case for better regulation in banking (August 2010):

"In fact, some of their most profitable customers, such as those who never pay off their credit cards in full, are also the very people who are least able to handle more debt. In this way, the impulses of individual consumers, carefully channelled by the banks, regularly come into conflict with the public interest.

Banks blasted for “unconscionable” credit card lending at Senate enquiry -  finder - 15 Nov 2016

Quantitative, Qualitative, 'Credit Card Distress' Authorities, Numeracy And Literacy Authorities, And Newspaper Article Evidence Of Unfair Credit Card Costs Which Prey Upon Financially Uneducated And Vulnerable Australians