So Bill Shorten wants to hold a royal commission into credit card interest rates. More of another smoke screen similar to his gay marriage bill if you ask me, but people must understand that the majority of CC's have a fifty day or so interest free period and, if those who fail to managed that force the prudent users to pay interest at say 9% on every dollar spent, it would be yet another case of the weaker, less disciplined ones being rewarded at the expense of those who use their cards in a prudent manner.

The other problem is that most CC's are unsecured debt which again could see many current card holders go without altogether.

So be careful what you wish for Bill!

Another bout of lazy populist grandstanding, without the slightest notion of what the objective of such a fishing expedition might be.

Credit card interest is actually at the low end of the rate scale for unsecured debt. A five-minute search found:

Dollars Direct: 48%p.a. plus a $400 fee that is included in the loan and therefore attracts the same interest rate

Sunshine Loan Centres: 4% per month plus a 20% "Establishment Fee" that also attracts this interest rate

Loan Ranger: 4% per month plus a 20% "Establishment Fee", which also attracts this interest rate

So, why the witch-hunt, and what does Shorten hope to achieve except i) the disbursement of even more taxpayers' funds and ii) some cheap big-bank bashing publicity?

Surely there are more effective ways to prevent the less-well-off members in our community from exposing themselves to financial disaster. Instead of regulating the lenders, how about preventing the financially vulnerable from borrowing in the first place, and/or incorporating debt-consolidation services within DSS?

Yes Pericles, your right except I'm assuming credit card interest, like most other bank loans is calculated daily and the interest is compounded.

However, it's still much cheaper than what you have described.

Even before the cuts in interest rates, credit cards were already highly profitable for the companies that issue them. The failure of interest rates to come down does not prove there's a market failure, but it certainly indicates there might be.

I can't see any good reason not to hold a Royal Commission. It's rather fanciful to suggest that doing so would make credit cards less readily available.

If you cannot pay off your credit card monthly, you are living beyond your means. For all I know, the interest rates might be too high, and an investigation might be warranted. But, in my opinion, if you have to spend the bank's money (and pay dearly for the service) to buy essentials and cannot save for a few luxuries, you are seriously in need of help to set up a budget. You don't have to pay; the Salvation Army and some others give free advice and training on how to set up a budget to suit individual circumstances. They cannot, however, help self-indulgent people who want everything here and now.

Fair comments, but is it reasonable to perhaps see prudent CC users pay interest on every purchase simply because some can't control their spending, because this could well be the outcome of any such enquiry as for the banks to give something they will most likely take something in lue, like reducing the interest free period, or even worse scrapping it.

The old rule often applies, that being ' for every action there is a reaction'.

rehctub,

I don't know that it is just "some" people. We now have the highest household debt in the Western world. It seems to come from the me,me,me self-indulgence that occurs when people are led to believe that they no longer need to take any responsibility for themselves. We do live in an age of entitlement (and I did not get that from the clownish Joe Hockey who thinks everybody is as rich as he is), but from experience.

Another problem apart from the pop psychology, that has people believing that all their problems lie in the past, is that governments actually encourage people to go into debt, and they set a very poor example with their own borrowing.

how bad can the nanny state become. Far more damage done by Bill's party in racking up massive debt than silly people who are taught to spend before they have. Why waste more tax payer money on this? May be if Bill's party sets an example in a little responsibility then his followers might so the same.

runner, the economy depends on spending money. Most of the money wouldn't even exist had it not been created by borrowing.

Our current economic problems aren't the result of borrowing too much, but too little.

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ttbn, would you regard someone who can't pay off their credit card completely every month, but can pay it down, as living beyond their means? And if so, why do you regard that as a bad thing?