Credit Card Fees No Longer Restrained By Reserve Banks
A rich and prosperous nation lashes out with their credit cards to live the high life, splashing out on luxury item like food and rent and electricity bills and mortgage payments.
The awesome gulf between John Howard's claims that Australian families are enjoying the benefits of a 'booming' economy and have never had it so good, and the reality of two million Australians (1 in 10) living below the poverty line, and millions more struggling to keep their houses paid for and food in the fridge becomes ever more stark, and disturbing :
They may feel ripped off, but the guilt-tripping propaganda and threats of legal action from banks that don't often even hold the money they are lending (themselves borrowing much of the money they issue as credit) does work, with 23 percent of surveyed people who have admitted to having paid late fees believing being hit with extortionist late fees "serves me right for not paying on time."
In a sign of increasingly hard times, over half of Australians have admitted to using their credit cards to get them between pays and cover cash shortfalls, a survey reveals.But plastic users are being stung with fees and charges and they aren't happy about it.
The survey of 1366 people conducted by NEWS.com.au and online polling firm Coredata found 54 per cent of people had used their credit card to get between pays after their cash ran out.
The survey revealed over 90 per cent of respondents had at least one credit card
with 36 per cent holding two. The survey was carried out between October 9 and 16.
A whopping 52 per cent of those with credit cards had been stung by penalty fees or interest rates in the 12 months before the survey.
Of those who had been hit with late fees, 83 per cent said they were a "rip off"...
The vast majority of late fees charged by banks are forced onto low income workers. People who use their credit cards to pay the bills that their wages cannot meet. Late fees build up, incurring more fees and interest charges. If you've ever wondered why so many people on low wages are courted by the banks offering generous credit, via credit cards, it is because the banks know that poor people will clock up late fees, and will incur greater interest fees accumulations than the wealthy.
Unfortunately, many poor Australians feel intimidated by threats of legal action from the banks, over fairly minor debts, not realising that many such letters of impending legal action are nothing more than form letters.
The good news is, as this story points out, more and more people caught up in the credit card swindle are finding ways to pull themselves out of the hole.
How do so many banks and credit institutions get away with swindling the poor on so many fees?
Easy. The Reserve Bank of Australia "removed restrictions on merchants applying surcharges to credit-card payments."
That is, the Reserve Bank, no longer contained by the federal government, is letting the banks run wild, charging exorbitant fees when people miss making repayments on their credit cards by one, or a few, days.
Australian banks, per customer, are now some of the most profitable in the world.