Australian's stung by credit card fees

In a sign of increasingly hard times, over half of Australians have admitted to using their credit cards to get them between pays, a survey reveals. But plastic users are being stung with fees and charges and they aren't happy about it.

The survey of 1366 people conducted by Coredata found 54 per cent of people had used their credit card to get between pays after their cash ran out.

The survey revealed over 90 per cent of respondents had at least one credit card with 36 per cent holding two.
A whopping 52 per cent of those with credit cards had been stung by penalty fees or interest rates in the 12 months before the survey. Of those who had been hit with late fees, 83 per cent said they were a "rip off", while 64 per cent said they wanted to close their account.

One out of three card holders (35 per cent) who incurred fees and charges did something about their situation. Of those who did something about fees and charges, 70 per cent complained to the organisation or friends (23 per cent) and nearly half demanded a refund (47 per cent).

Beyond that, one in five or 20 per cent closed the account and 16 per cent stopped using the credit card. But some respondents admitted self-fault, with 23 per cent of late payers said the fees "served me right for not paying on time."

Not all consumers are fully informed about their plastic. Many respondents, or about 34 per cent, were not sure of the interest rate on their credit card. But most people (78 per cent) knew how many interest-free days they had.

The moral of the story is that you must read the small print before you sign up and use your credit card. Check the Product Disclosure Statement carefully, and watch this site for general reviews on the benefits, and equally, the catches behind the glossy credit cards.

Published on January 1-st, 2008 in Credit Cards
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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