Big banks accused of setting 'debt traps' with credit cards "It's predatory behaviour."

Jose Lacoto managed to run up a $30,000 credit card debt.

But he's still puzzled why his bank gave him the card, why they did not check his income status - only a simple check, he says, would have revealed he had no chance of repaying the debt.

Big banks have been accused of using predatory advertising tactics to push "debt trap" zero per cent balance transfer cards on consumers right when they are at their most vulnerable - just after Christmas.

Banks wait until people have spent up big on presents, and are stressing over mounting credit card balances, before swooping with an advertising blitz selling balance-transfer credit cards just after December 25.

The ad strategy lays bare the banks' thinking on credit cards: credit card users don't generate much profit, but balance-transfer card owners generate heaps.

Mr Lacoto, 66 of Liverpool, was one of those people targeted.

About six years ago, he had a hip replacement that left him unable to do his cleaning job at a local hospital. He was on the disability pension, his wife wasn't working, and he already had a solid slab of credit card debt to service.

"We did not have enough money to pay - just to help me pay, that's why I took out the first one," he said.

"Christmas came, all the presents I had to buy for my children and nephews and nieces, I lost control. It was really hard to make repayments.

"They did not check. They should have checked my record, that I have enough money to pay. I was desperate, always thinking I was going to pay, when you're younger you're not thinking 'I can't pay, I can't afford it'."

Leapfrog Financial's Dominique Bergel-Grant, said people like Mr Lacoto are "effectively" the banks' "dream client".

Balance-transfer clients are the problem gamblers of the credit card market: they are the most vulnerable, they spend the most, and they rarely are able to stop themselves.

"Typically we see a huge advertising uplift starting from mid-December, all the way through to mid January," says Avrill D'Costa, head of data at Big Datr, which tracked the ad spends.

"And then the ads change a bit. In December it's all about spending - how you can get bonuses and rewards. Towards the end of January it's all about balance transfers or moving to a different credit card."

The credit card market is dominated by the 'big four' banks, with the Commonwealth Bank the largest issuer in Australia. However the Commonwealth does not issue zero-per-cent balance-transfer credit card offers.

Balance transfer cards are designed for existing credit-card holders who are deep in debt, argue critics The card promises an interest-free period in exchange for swapping your debt from one company to another.

Many who sign up see it as a fresh start, a chance to get out of debt. But instead, they get into more debt and pay more interest.

"Our view is that those balance transfers are really no more than a debt trap set by banks, and that's where they make a lot of their profit on - people that aren't able to pay it back," says Gerard Brody, CEO of the Consumer Action Legal Centre. "It's predatory behaviour."

The banks claim zero per cent balance transfer cards offer consumers a good chance to get out of debt.

"It is interesting to note that for the past 11 years repayments have exceeded spending on credit cards over December and January," a spokeswoman from the Australian Bankers Association told Fairfax Media.