Westpac has announced a change in policy for credit card owners and will now charge interest on interest and as well as on fees paid by customers for items such as late payments.
The change in policy is seen as a blatant cash-grab by the company which is already making about $18 million a day in profit.
Westpac has written to all of their credit card customers advising that “interest will also apply to interest charges and fees on your credit-card account”from June.
Choice spokesman Christopher Zinn was critical of the change.
“I think interest on interest is sneaky,” he said last night.
A spokeswoman from Westpac defended the change, arguing that for an average customer with a $3600 balance would only be paying an extra 67c a month in interest.
“We are only bringing our approach into line with industry practice.” She said. “It’s not a huge difference and it’s no different to how any of the other banks do it.”
Countering the claim that this was ‘industry practice’ w spokeswoman for NAB pointed out that while the bank did charge interest on interest, it did not also charge interest on things like late payment fees, as Westpac has announced.
