Source: TVNZ
The Commerce Commission has begun an investigation into unreasonable charges on late bill payments for credit cards. Collectively, New Zealanders owe almost $5 billion on credit cards. The Commerce Commission investigation has been prompted by similar action in Britain in which its Fair Trading Office found hefty late payment fees unfair. As a result their banks cut fees by half.

Penalty charges for credit cards in New Zealand can be up to $25 - even if a payment is just a day late - and that is on top of interest. The Consumers’ Institute says while credit card holders need to take charge of their debt, the fees are unfair in some cases. “You do have to be responsible for your own card and you should try and pay if off on time, but then you are encouraged to use credit cards and if you are late by a couple of days then you shouldn’t have to have an outrageous fee slapped onto your payment,” says Consumers’ Institute spokesperson Sue Chetwin. Budget advisors are dealing with the consequences of what they say is a growing trend.

“What we’re seeing is that in this day and age more of the loan companies and the credit card companies are taking advantage of the fact they can get away with doing these charges,” says Salvation Army spokesperson Katherine Martin. The banks say the fees recover their costs and customers are always provided with information on that cost base.