One-third fail to pay off debt after transfer deals
AT LEAST three in 10 customers do not pay off debt transferred to a new credit card under 0 per cent balance transfer deals, a major bank has revealed.
In a submission to a Senate inquiry into credit card interest rates made public yesterday, ANZ said 70 per cent of people either transfer again or clear their balance before a high interest rate kicks in.
“In ANZ’s experience most customers use balance transfers as designed – to reduce interest payments and repay their credit card debt,” the statement said.
But in another new submission, Financial Counselling Australia said: “Balance transfers clearly target people struggling with debt and can leave them worse off.”
The hearings resume today.