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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2008-11-12 Daily Xml
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CREDIT CARDS

The Hon. R.P. WORTLEY (15:12): I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question about credit.

Leave granted.

The Hon. R.P. WORTLEY: With only 42 days left until Christmas, many people will be thinking about presents for family and friends. If we are not careful, post-Christmas can be a headache sometimes when we realise the damage done to our hip-pockets. Will the minister advise the council what consumers need to be wary of when using their credit cards?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (15:13): The Christmas Pageant having heralded the start of the gift-buying season, consumers are encouraged to shop smart and avoid the potential traps of using credit or interest-free terms.

An honourable member interjecting:

The Hon. G.E. GAGO: He won't be getting any pressies this year. Santa will give you a miss for misbehaving. Lots of shoppers like to get in early with their Christmas shopping, but it is important to plan for Christmas spending very carefully. The buy-now, pay-later approach can create a great deal of stress further down the track when repayments are due along with household bills and expenses. Many retailers heavily promote their own cards and interest-free term offers at this time of year.

There is nothing wrong with using credit cards, but consumers need to read and understand the terms and conditions. It is important to do the sums on what fees are to be paid and what amount may be remaining after the interest-free period expires. It is a good idea to try to pay the balance in full each month. Interest-free term purchases usually involve a fee charged for the service and severe penalties for late payment, so consumers need to keep their eye on those sorts of terms.

I would like to take this opportunity to remind consumers that they should not assume that, by making the required minimum payments during the interest-free period, the total bill is then paid. It is often a long way from it. With some interest-free agreements when the interest-free period ends there may still be money owed on the purchase, and that remaining sum may incur a large interest charge. To help avoid a large Christmas credit crunch consumers should remember the following:

set a budget and stick to it;

shop around to compare prices;

read the terms and conditions carefully before agreeing to buy now and pay later;

consider alternatives to credit, such as lay-by;

try to pay off credit card balances in full each month; and

seek advice from a financial counsellor if debts seem to be spiralling out of control.

Consumers should also remember that stores are not required by law to return your money if there is nothing wrong with the product you have purchased. Some stores will, but do not assume that they have to; always check that they are prepared to accept returns and under what conditions. Consumers are entitled to a refund if the goods are faulty or if they do not match the description or are not fit for the purpose, such as if a watch described as waterproof turns out not to be waterproof. People should make sure that they keep their receipts or credit card slips as proof of purchase.

Signs that state 'No refunds' are incorrect; there is a statutory warranty that applies to all goods and services if used for the purposes intended but found to be unfit for purpose. So, if there is a fault with your goods you are entitled to return them, given those conditions. Consumers should report any stores that say things like 'no refund on sale items' or 'no refunds after seven days' to the Office of Consumer and Business Affairs, as these signs ignore one's statutory rights to a refund and are in breach of the fair trading laws. Being informed of your consumer rights can help you make wise purchasing decisions.

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