Credit card confusion catching Qlders out

New RACQ research has revealed just how little Queenslanders understand about credit cards, with more than a third of those surveyed admitting they had no basic knowledge of the fees they’re charged to swipe their plastic.
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RACQ Bank spokesperson Lucinda Ross said the results were a timely warning to Queenslanders who may be at risk of being caught out.

“It’s really concerning so many Queenslanders don’t understand some of the basic fees or terms associated with credit cards,” Ms Ross said.

“We found more than half didn’t understand credit card chargebacks or consumer credit insurance –which could cost them at bill time.

“While credit card chargebacks can help consumers with a purchasing issue, consumer credit insurance offers really poor value for money. It’s important, if you have a credit card, to understand exactly what you’re paying for.”

Ms Ross said Queenslanders should only sign up for a credit card if they understood how fees, charges, and payments worked, and if they could comfortably pay the balance back before the due date each month.

“It’s clear Queenslanders are confused by critical aspects of having a credit card, and we don’t believe it’s right to encourage use of something you don’t clearly understand,” she said.

“If you’re not sure what your credit card is doing to your hip pocket, or when your repayment is due, jump online and do some research.

“More than 20 percent of Queenslanders don’t understand what a credit rating is and how it affects them, but it’s really important you don’t put yourself at risk having a bad credit rating.

“Your credit score is calculated based on the amount of money you’ve borrowed, the number of credit applications you’ve made and whether you pay on time. These factors can vary widely, so make sure you’re keeping track of how your credit behaviour impacts your score to safeguard your future.”

For more information about financial wellbeing, visit RACQ’s Financial Wellbeing Hub.

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The information in this article has been prepared for general information purposes only and is not intended as legal advice or specific advice to any particular person. Any advice contained in the document is general advice, not intended as legal advice or professional advice and does not take into account any person’s particular circumstances. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives and needs.