Credit card users will count the cost this Christmas

Thursday 15 November 2012

Article by Mozo

Aussies are expected to spend their cash a little more readily in the coming weeks, as Christmas draws ever closer.

Although Business Day reported this week that credit card spending was down again in September, economists are expecting a sharp upturn in December.

However, card holders will rack up a significant interest bill, as banks have been reluctant to pass on rate cuts made by the Reserve Bank of Australia.

Kirsty Lamont, a director at Mozo, told the Herald Sun that banks are clawing in an extra $25 million a month in interest from their card customers and shoppers are set to be hit with a total charge of $533 million this Christmas.

The national cash rate now stands at just 3.25 per cent, but the average interest attached to plastic products is 17.29 per cent.

"Banks are trying to siphon more profits from credit cards to compensate for a sluggish home loan market," Ms Lamont was quoted as saying.

With this in mind, it is perhaps more important than ever to compare the best credit cards rather than settling for the first deal you find.

Have a question about credit cards? Ask the money gurus at Mozo Answers.ADNFCR-1761-ID-801488449-ADNFCR

Credit card users will count the cost this Christmas

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