Loans Expert

Hidden details about the interest charged on partly-paid or overdue credit card balances is unfairly costing customers, consumer advocate group Choice says.

A study of 20 credit card companies showed the amount of interest charged on a credit card can depend as much on when a provider stops and starts charging interest and how fairly they apply interest-free days as the actual advertised interest rate.

American Express, Bankwest, Commonwealth Bank, ANZ and Westpac were named as the most unfair credit card providers.

Bank of America Corp., the largest U.S. lender, may report its third loss in the past five quarters as its new chief executive officer tallies costs from consumer loan defaults and repaying bailout funds.

Results for the final three months of 2009 are due tomorrow, and analysts’ estimates of a potential loss range as high as $4.9 billion by Sanford C. Bernstein’s John MacDonald. The bank’s largest rival, JPMorgan Chase & Co., last week called its own fourth quarter “a little disappointing,” even though profit more than quadrupled, as the retail unit posted a loss and the firm boosted consumer loan reserves by $1.9 billion.

IT IS the twelfth round and both fighters are on the ropes.

Credit cards, popular with the crowd, have been through a lot of fights and are a little punch-drunk.
Personal loans may not be as popular but their lower interest rates are keeping them light on their feet.
OK, it’s not quite a sweat-laden title fight, but you can win if you know their game plan.

Why a credit card

Australians had 12.3 million credit cards in their wallets in July, carrying $40.4 billion of debt. We clearly like them, Zobel Finance manager Simon Burgess says.
“They are there to assist with everyday lifestyle costs and having $5000 should you need it,” he said.

Banks tightened the spigots further on all sorts of lending, from home mortgages to credit cards and business loans, as the worst financial crisis in seven decades took a bigger toll on the economy.

The Federal Reserve said Monday that its latest quarterly survey of bank lending practices found high numbers of banks reporting tighter credit standards across a broad range of loan products. Nearly 60 percent of banks responding to the survey said they had tightened lending standards on credit card debt.

“We’re into the eye of the storm here,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight in Lexington, Mass.

MUMBAI: Banks are increasingly allowing borrowers to convert credit card dues into personal loans in a bid to stave off defaults triggered by inflation and rising rates. All leading banks are offering investors an option to pay for purchases in installments. While some are being proactive, others are offering them as part of a restructuring package after classifying the customer as delinquent.