Consumer champion the Australian Consumers’ Association (ACA) comes across plenty of dodgy quirks and perks in its border patrol of spruiking territory. Each year the ACA slaps a few of those who cross the boundary with an award, so impressed is it with the utter stupidity, weirdness or downright dishonest state of the spruik.
These are the Shonky Awards:10 products to make you weep in despair. The 10 Shonkys for 2006 were released this month. And right up there for its stealthy swindling was what we all could have picked years ago: the oldest credit card for the way interest is calculated. “We looked at 15 major credit card providers and found they calculate interest in at least 10 different ways. That alone deserves a Shonky for consumer confusion”, the ACA consumer mouthpiece Choice announced on its website.
“If you end up paying more interest on a credit card that charges 10 per cent interest than on one charging 18 per cent for exactly the same transactions, then it must be either a mistake or a new fund mental mathematical breakthrough. Or just plain meanness – which is what we’d like to award here: the eight credit cards that calculate daily interest on the full purchase amount back to the original date of purchase, even if you’ve paid some of it off in the meantime.”
The ones that void the interest-free period for new purchases if you’re carrying an unpaid debt from the previous month. The ones that covertly hurt you if you can’t pay off your balance by the due date. Fair cards use one or more of these ways to calculate interest on overdue amounts: Interest only applies to amounts that are unpaid by their due date – you get credit for partial repayments. Interest charged only from the date the new statement was produced. An interest-free or ‘grace’ period for new purchases even if you’re carrying an unpaid debt from the previous month. Mean cards calculate interest on overdue amounts in these ways: Daily interest on the full purchase amount, even if some of it was repaid time; Interest charged back to the original purchase or posting date; No interest-free period for new purchases if you’re carrying an unpaid debt from the previous month.
