Credit card rule reforms are "overdue"

There needs to be reforms in terms of credit card rules, one writer says.

Australian credit card rules need to be looked at and changed, according to one writer.

The Age's John Collett believes the time has come for reform after Choice – a consumer group – said it is "unfair" what most of the providers of credit cards charge in terms of interest.

Someone has to pay an "exorbitant" interest rate if they do not pay their card off in full at the end of every month.

He added: "It's the consumers attracted to cards offering promotional low-interest rates when they transfer from their existing cards that potentially face the biggest sting."

Mr Collett noted that National Australia Bank – which offers NAB savings accounts – charges a 20 per cent cash-advance rate on any outstanding funds after a balance transfer from another card.

Earlier this month, Robert Morgan, head of market analysis for banking research and adviser East and Partners, suggested credit cards are becoming less popular compared to debit cards.

By Kate Guthrie