Aussie banks set 'overdraft traps'

By Mozo ·

Some of Australia's major banks are looking to entice depositors into taking out overdrafts on basic transaction accounts, it has been suggested.

Nicole Rich of the Consumer Action Law Centre claimed that because more consumers are now looking to compare credit cards and control debt levels, the banks are having to find alternative means of trapping customers.

"Australians are starting to better manage their credit cards," she told the Herald Sun. "So the banks are trying to find new ways to get us hooked so they can generate profits off the interest."

The comments come after ANZ offered home loan borrowers the chance to apply for $1,000 "safety net" credit limits that come with an interest rate of 18.87 per cent.

Ms Rich noted that overdrafts tend not to come with interest-free periods like those offered on credit cards.

She added that daily bank accounts should be "a simple financial safe place" and not a potential "debt trap".

ANZ defended its offer, stating that it was only extended to home loan borrowers with good credit histories.

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