Westpac 'to increase fees' on credit card accounts

People who have credit cards with Westpac will be alerted to the news they will have to pay interest on their charges.

Westpac has written to credit card customers to inform them they will have to pay interest on their charges in the near future.

The bank – which makes millions of dollars in profit a day – has told customers who have credit cards it will be putting interest on top of interest from June, the Daily Telegraph reported.

Jane Counsel, a spokesman for the organisation, defended the move by saying it already does that with its savings products.

But this recent announcement has not pleased the government and treasurer Wayne Swan implied it was not the first time the Westpac had done something like this to its customers.

He added: "Unfortunately, this bank seems like it's becoming a serial offender when it comes to taking its customers for a ride. This kind of behaviour by Westpac is exactly why people don't like the big banks."

All Westpac cards will be affected by the move, however, the firm believes around half of its customers will see no financial changes because they pay off their balance in full each month.

Ms Counsel noted: "It's not a huge difference and it's no different to how any of the other banks do it. We are only bringing our approach into line with industry practice."

A spokesman for National Australia Bank – which offers NAB savings accounts – said it does not charge interest on fees, although, he believes Westpac will.

Choice's Christopher Zinn suggested the decision to charge the extra interest was "sneaky" and it now makes it a difficult process to know what the rate is on a specific product.

This news comes after Westpac offered financial relief to its customers affected by the storms and flooding in Melbourne and parts of Victoria earlier this month.

It allowed credit card customers to ask for an emergency Aussie credit limit increase and waived charges on people wishing to withdraw money from their term deposits.

By Emma North