16 December, 2015
Industry super fund-owned bank ME today said it broadly supported the recommendations of the Senate Economic References Committee into credit cards.
The Committee released its final report on ‘interest rates and informed choice in the Australian credit card market’ on 16 December 2015 including 11 recommendations.
The Bank said overall the Committee’s recommendations if adopted, would benefit consumers by improving transparency, awareness and competition within the credit card market.
ME Head of Deposits and Transactional Banking, Nic Emery, singled out two of the Committee’s recommendations as particularly beneficial.
“In the case of balance transfers, recommendation 8 would ensure consumers with outstanding balances know when the interest-free period was about to expire.
“This will help customers avoid the higher rates that kick in after the interest-free period expires.
“Recommendation 8 also includes a proposal for the provider to initiate discussions about the suitability of a customer’s current credit card if their outstanding balance has not been paid.
“This could help reduce the number of customers getting into unsustainable cycles of credit card debt.
“Recommendations 1 and 2 would also very beneficial: by clearly including interest rates and annual fees on credit card advertising and marketing material and credit card statements, consumers would be much more aware of their rate they’re paying.
“ME research shows 73% of card holders don’t know their current rate and 40% don’t know if their card had an annual fee.
“Greater awareness is good for consumers and would help promote greater competition within the credit card market.