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Eight million Australians trying harder than ever to clear credit card debt are being thwarted by sky-high rates. In the 18 months prior to Christmas, $3 billion was wiped off plastic — the most sustained decline since the Reserve Bank began keeping records in 1985. However Australians still owe $34.2 billion and are being charged $6.2 billion of interest annually — $800 per Cardholder. Across 15.5 million cards, the average interest rate is now 17 per cent, up 2.5 per cent in the past six years despite the official cash rate plunging from 6.5 per cent to just 2.5 per cent in that time. In a bid to turn the tide in favour of consumers, a News Corp Australia-backed moneysaverHQ.com.au campaign will leverage combined buying power to negotiate better offers from major providers. “It’s all about getting a better financial deal for average Australians,” moneysaverHQ’s expert commentator David Koch said. It was a ‘catalyst for Aussies to join together, to flex their combined financial muscle and get the same attractive deals usually reserved for institutions or the wealthy few,” he said. Kirsty Lamont, director of financial product comparison service Mozo, which is partnering moneysaverHQ in the campaign, said: “We are hoping to be able to use the power of people to negotiate credit card rates that will really help Australians pay down their debts once and for all. “That nearly $800 of annual credit card interest is enough for a family camping holiday.” Tom Godfrey, spokesman for consumer group Choice said: “Check out your interest rate and if you think you are paying too much, switch. “We need to make banks hungrier for our business. They need to compete a little harder for consumer credit.” Mr Godfrey said many consumers were choosing “balance transfer” deals where existing debts were not charged any interest for a year or more: “That’s a great thing. You should take advantage of that.” News Corp Australia expects to earn a commission on each credit card issued under any offer that may be secured, although News will not be involved in the negotiation of any offer and is simply combining the power of readers to put pressure on providers. The negotiating will be done by Mozo, which has an Australian credit licence that authorises it to provide credit assistance and act as an intermediary. Mozo expects to earn a commission. |
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