Cheap credit cards could be better than payday loans

Cash-strapped Aussies who turn to payday loans may be better off getting their hands on cheap credit cards.

A report in the Sydney Morning Herald claimed that once the federal government takes over the regulation of consumer credit, the interest-rate caps on such loans will be removed.

Instead, the organisation will rely on responsible lending laws to push payday loan providers in the right direction, although Aussies may want to rely on cheap-rate credit cards instead.

Speaking to the newspaper, Therese Wilson, who chairs the Australian Microfinance Network, said: "There will be a responsible-lending requirement attached to credit contracts and I think it’s relying on that to minimise exploitative lending practices."

The AAP previously reported that new laws could soon clamp down on dodgy lenders who offer credit cards that Aussies cannot afford.

Other financial products which are expected to be included under the tough legislation are mortgages, it added.

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