Credit card providers 'need to employ fair methods'

Credit card suppliers need to apply "fairer systems" on their interest rate charges, a consumer advocate claims.

Credit card companies have been called on to be fairer to customers after a survey revealed the way in which interest rate payments are calculated differed largely.

Choice, a consumer advocacy group, surveyed 20 credit card companies to assess how they charge their customers who pay interest on their card bills.

Christopher Zinn, spokesman for Choice - which has more than 200,000 subscribers in its community for consumers - said that "tricks of the trade" make things difficult for customers and "fairer systems" need to be implemented.

He said: "Many consumers would be surprised to learn they could have two cards with exactly the same interest rate and use them in the same way yet have one charging twice as much interest than the other if they pay late."

The survey results showed that Heritage Building Society and Bendigo Bank came out more favourably in terms of fair treatment of customers, but Westpac and ANZ were amongst the banks "using unfair interest calculation".

Among the practices deemed unfair by Choice is some credit card providers' handling of late repayments, which could see consumers charged retrospective interest on all their Aussie credit transactions for the previous 55 days.

Consumers have also been warned to look at the small print related to partial repayment of their debt, as interest may be calculated based on the total purchase cost as opposed to the outstanding amount.

By Emma North