Why The Rush To Prepaid Debit Cards? Why Not?

In 2009, consumers loaded roughly $29 Billion on pre-paid cards, which are especially popular with young adults and those considered underbanked — meaning they have little access to mainstream financial institutions like banks. But by 2013, that amount is expected to reach over $200 Billion, according to an estimate cited in a report from an arm of the Pew Charitable Trusts.

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Credit card rates four times OCR : RateCity

The average credit card interest rate is four times more than the Reserve Bank cash rate, with providers estimated to be earning $6 billion a year in interest.

According to research conducted by RateCity, the average purchase rate across 200 personal credit cards is 17.16 per cent, while the current RBA official cash rate is 4.25 per cent.

In total, 90 per cent of cards have kept their purchase rates at the same level as October 2011, while nine of the 200 cards dropped their purchase rate since this time. However, only four passed on the 50 basis points resulting from two consecutive rate cuts, while nine increased purchase rates by up to 100 basis points.

Commenting, RateCity’s chief executive officer, Damian Smith, said: “Credit cards will have much higher interest rates than the Reserve Bank’s case rate because they are unsecured loans and therefore have more risk of default.

“But we can’t see any reason why they are charging higher margins above the cash rate compared to the peak of the global financial crisis,” he said.

Credit card demand waning – Personal Loans Up: Veda

Applications for credit cards fell 9.9 per cent in the last quarter of 2011, recording the largest Q4 fall since 2009 and the second largest year on year last quarter drop in six years.

Queensland registered the biggest year on year decline, recording a 14.5 per cent fall in demand, followed by New South Wales (11.8 per cent) and Victoria (7.7 per cent), according to the latest Consumer Credit Demand Index from Veda.

The sharp decline in credit card applications across the country late last year bucked the trend from earlier quarters in 2011, pointing to a slowdown in consumer demand for credit during the final three months of the year.

 

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Personal loans vs credit cards – cut and dry argument from Mozo

Okay, so prior to becoming a financially responsible Mozonian, you had an unfortunate episode with your credit card. Or you’re looking to make a necessary and major purchase that’ll take a while to repay.

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Debt that pays a 25% interest rate? Become The Credit Card Company

Credit card companies make lots of money. In fact, not including penalties and fees, credit card companies have averaged over a 10% annual return on their loans, over the last 26 years.

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Credit card rewards swiped, RBA finds

An RBA analysis of the new premium categories of credit cards that include higher annual fees shows users have to spend less – about $11,000 to earn a $100 shopping voucher – while some standard and lesser premium category users have to spend as much as $22,000.