ING’s bold plan to cut card debt
finances to ensure responsible lending and to ensure customers are not getting into a debt trap,’’ he said.
“To be able to offer responsible lending to customers we’ve increased that amount (to 10 per cent) ... to ensure their borrowing is in control.”
Australians owe a massive $52.5 billion on credit cards and more than $32.9 billion is accruing interest.
On the average card debt of about $4200, under ING customers will have to pay back $420 per month.
Consumer watchdog Choice spokesman Tom Godfrey said the move was “great to see a bank willing to try something different”.
“A higher minimum repayment will see ING issuing credit cards to people more likely to be able to afford to pay off their total balance,’’ he said.
Financial comparison website Ratecity spokeswoman Sally Tindall said the minimum repayment increase “forces people to pay back more of what they owe before it starts spiralling out of control”.
“It’s great to see a bank actually taking their lending responsibilities a step a further,’’ she said.
“A lot of credit card providers let their customers pay off the bare minimum, instead filling their profit margins with the interest.”
The cards will be available to existing ING Direct customers in phases before being rolled out widely later in the year. The card’s interest rate is 14.99 per cent.