Another non-bank moves into the banking arena after retailer Woolworths signed a deal with HSBC to issue the Woolworths’ credit card, due for release later this year.

The deal was a result of a global tender process undertaken by Woolworths’ financial services team last year.

“HSBC is a global leader in credit cards with world class technology and expertise,” Michael Luscombe, Woolworths’ CEO, said.

HSBC has long-term successful partnerships with large retailer card programs overseas, such as, Marks & Spencer’s in the UK and Saks in the USA.

“HSBC manages over 125 million credit cards worldwide, with established co-branded and white label alliances with over 100 of the world’s most respected companies, “ Stuart Davis, chief executive of HSBC Bank Australia, said.

Luscombe noted, “HSBC’s experience makes it a perfect partner for Woolworths to leverage our unique distribution reach and customer base in Australia.”

Woolworths stores process 114 million transactions or 11 per cent of all credit card transactions in Australia each year.

The companies are expected to sign a formal agreement by the end of first quarter 2008.

source [Full article here]

The new David Jones American Express card will be launched in time to capitalize on the busy Christmas trading period, which last year generated sales of about A$36 billion.

David Jones’ financial services business will deliver at least 7.5 percent earnings before interest and tax growth (EBIT) a year over fiscal year 2008, it said in the statement.

More on the David Jones Credit Card

It’s looking bad for over 350,ooo Victorians who are juggling more than 3 credit card or charge cards at the same time. Finance counselors are seeing people who can’t afford to pay off their credit cards debts by taking out more credit cards to pay off the debt of the initial credit card and subsequent cards.

” It’s not unusual for people we see to have six or more credit cards.” - Jan Pentland : Australian Financial Counselling and Credit Reform Association.

read more

Visa has extended the period allowed for merchants to upgrade their smartcard payments technology to 30 September 2009. The upgrades will reduce the risk of fraud and some retailers who comply could receive discounts of up to 25 per cent on their interchange fees. The Australian Merchant Payments Forum chairman, Russell Zimmerman, has said that the extension was appreciated as the extra time would help offset set-up costs which can be expensive, particularly for merchants that owned their own terminals.

By InfoChoice.com.au

Latest credit card fraud data shows that there are 14.8 cases per 100,000 transactions in the 12 months to June 2006 to 16.7 this year. which is quite low, though when compared to Britain which has a staggering 141 cases of fraud for every 100,000 transactions.

Does this mean Australia is a little more robust when dealing with financial data online & Offline than our British counter parts? I guess we’ll have to wait and see what next years figures indicate.

The article data didn’t breakdown the data between Online and Offline Credit Card fraud.

below is an excerpt for the article.

Debit cards also experienced a higher rate of fraud, going from 1.7 to 2.1 cases for every 100,000 transactions.
Fraud was down in other categories according to the latest set of data from the Australian Payments Clearing Association.
Cheque fraud fell from 2.4 cents per $1,000 to 1.4 cents while EFTPOS and ATM fraud dropped from 8.2 cents to 7 cents for every $1,000.
Overall the number of fraudulent transactions increased from 7 to 8 cases for every 100,000 with a total value of $128.5 million for the year to June.

Source: Infochoice.com.au

These figures are astounding, only seven years ago only 11 percent of bankruptcies had been brought on by credit cards. Fast forward to today, 27% of the bankruptcies are credit card related according to the data from the Insolvency and Trustee service of Australia.

The largest increase in credit cards related bankruptcies were from New South Wales and Victoria.

source: Infochoice

Do you keep hoping from one low rate credit card offer to another to help lessen your credit card balance? Well get ready to get hit a new balance fee charge. According to Infochoice, many of the credit card issuers are aware of this trend and are now looking closely at applicants credit card history to indentify these patterns, which they call “rate tarts”

Credit card issuers have become more wary of “rate tarts” who shift card balances around to take advantage of introductory low rate offers according to Infochoice’s general manager, Denis Orrock. He warns that while consumers may get three or four chances to switch cards companies will start rejecting applications. Card issuers can access credit history files to see if there is a pattern of applying for a card every six months and may decide that you are not the type of customer they want if rate-tart activity is identified.

Mr Orrock said that he expects card companies will introduce balance transfer fees where a percentage of the transferred amount is charged to cover costs and discourage card churn.

A new method has been created for online payments so that credit card and bank account details do not need to be used. Consumers can buy a VCard virtual voucher with credit of up to $1,000 which can then be used instead of a credit card wherever Visa is accepted. The VCards can be purchased from retailers in a similar way to purchasing pre-paid mobile phone credit and cost $5.50 for each voucher. Each VCard comes with a Visa card number, expiry date and three digit security code. Market research firm Forrester earlier this year estimated that 7.2 million Australians shop online and this is expected to increase by 22 per cent each year until 2010.

By Sydney Morning Herald

A News.com.au / CoreData survey has found that over half of Australians admit to using their credit cards to bridge pay periods. The survey also revealed that 90 per cent of respondents held at least one credit card whilst 52 per cent said that they had been charged penalty fees and or interest in the 12 months before the survey.

By News.com.au

HSBC is one of the world’s leading banks and it has been well known for its huge credit card business. However, it has recently just sold part of its credit card business, including “Marbles” the well known credit card loved by many consumers.

The business has been sold to SAV Credit and it was sold for an impressive £385 million. The move will affect over 300,000 consumer accounts and whether it proves to be a popular decision will remain to be seen.

The reason given for the sale of these credit cards is that HSBC has actually developed its own branded card business recently. The Marbles credit card was said to be non-core and so HSBC did not see the need to keep it as well as their other cards.

It is not a huge shock to consumers however as Marbles has not been accepting any new business since April 2007. It has been losing out to more competitive credit cards and so to HSBC it was simply time to move things along.

The Marbles credit card continually had some market leading offers, which included 0% balance transfers and cash back.

Overall consumers do have mixed reactions to their accounts being sold on. On the one hand they are angry and worried about the changes which may occur. However there are some consumers who are also happy with the move and they feel it will bring positive changes as SAV Credit are a smaller company and they may have more time to develop the card into something better.

In a challenge to credit cards online payments company PayPal is expected to launch a service sometime in the next few weeks that will allow Australian customers to make payments for prepaid mobile accounts online. After negotiations with Prepaid International, Paypal has been given access to many high-traffic websites and the deal will allow prepaid customers of Optus, Virgin, 3, Boost Mobile and Dodo to use PayPal to recharge their phone rather than Visa or Mastercard. PayPal estimates that it currently has over 3 million customers in Australia.

By The Financial Review

The latest figures from the Reserve Bank of Australia show that more consumers are trying to reduce their credit card debt with an average balance in August of $2,999, down slightly from the previous month, but still 5.7 per cent higher than a year ago. A record $18.1 billion was repaid onto our cards which is $1.4 billion more than the same month last year. Still, total spending on cards was over $18 billion making the total outstanding debt in August $41.1 billion.

News Source: Infochoice.com.au

Just like the large Department Stores Myer and David Jones, that offer the customers with instore credit cards. Woolmorths, Australia’s largest supermarket chain will be following suit by offering their customers the Woolworths credit card. The Woolworths credit card is due to be released next year.

Woolworths is expected to offers extra services like home and car insurance and loans.

Now it’s Woolworths, the credit card people

Major banks have earned an estimated 90million dollars in credit card fees, with majority of the fees stemming from credit card limit violations and late payments.

Several community groups like the St Vincent de Paul Society and the Family First Senator are supporting the move for reduced fees for low-income earners, which would place restrictions on penalty fees.

more: Bank nets $90Mil in Credit Card Fees

Research by research group Oxera has found that the typical median-income Australian family pays $222 each year for a transaction account, while an equivalent family in Britain only pays $48. The news is better on the credit card front though: our average interest free period of 35 days ranked in the middle of the 11 countries surveyed and our rates are not particularly high after taking into account differences in the cash rate. Penalty fees for late payment, overdrawing accounts or exceeding card limits can be up to $150 in Britain but are usually less than $40 here. Australian consumers are also offered a wider choice of account types which means that fees can be minimised by taking a basic bank product or higher fees can be paid for a product with more features.

Source: www.infochoice.com.au

Virgin Money are going to resist passing on to their customers any increases in funding costs for now, accepting reduced margins instead. Virgin’s home loans are funded by residential-backed mortgage securities from Macquarie bank which has a 10 per cent stake in the company. If the current level of expense in credit markets persists for a long period Virgin said that it would have to consider raising rates. The company also said yesterday that its credit card business was very profitable despite offering some of the lowest rates in the country.

source: http://www.infochoice.com.au

The Australian Bankers Association has called for an end to regulation of interchange fees on debit and credit cards by the Reserve Bank of Australia. Instead the association says that interchange fees should be set on commercial terms by the market, helping to restore regulatory certainty, and reducing the risk of sub-optimal levels of investment and innovation. In its submission to the review of payments system reforms American Express said that they had given merchants a significant and ongoing financial benefit, estimated to be at least $2.2 billion since 2003, but that there was no evidence of any decrease in the price of goods and services resulting from this.

Source http://www.infochoice.com.au

Those long waits at the checkout counter will be a thing of past if NAB and Telstra have their way. Both companys have teamed up with VISA to trial the new technology that allows customers to authorise payments by waving their mobile phone past special electronic markers.

The new mobile phone could potentiall replace the credit card as well as public transport tickets and building access security cards.

The new technology is currently being tested overseas, with Australia set to trial the PayWave technology early 2008.

Source: Infochoice.com.au

Customer of the ANZ bank that currently hold a Centrelink Health Care Card, Seniors Concession Card, Pensioners Concession Card, or Veterans Affairs issued Repatriation Health Care Cards, will receive a reduced dishonor fee for cash advances that go over the credit card limit. The cash advance dishonor fee will be reduces from $35 TO $10.
The new policy will take effect from 1 December.

Source: Infochoice.com.au

The abolition of ATM interchange fees could mean lower charges to consumers. The removal of the fee, typically $1 per transaction, should lead to a substantial reduction and perhaps even abolition of the fees that consumers are charged when using another bank’s ATMs. From October next year, the owners of ATMs must disclose fees charged, increasing transparency of any charges.

source from Infochoice.com.au

The latest figures from the financial review, Banks are starting to see a trend in the way Customers are using their Credit Cards. While the total credit card debt was up $508 Mil from the previous month, the growth rate for credit card debt is slowing. With a definite downward trend for the use of the credit card cash advances.

Which is a good indication that customers are starting to feel the effects of interest rates applied to the cash advances. The average outstanding credit card debt for bank customers is around the $3,014.

from Infochoice

NAB’s latest ATM fee rise should generate the company around $50 Million in the next year.

The fees effect NAB customers using other bank ATMs. unfortunately for NAB customers, the bank is currently upgrading their ATM’s, leaving NAB customers having to use competitor ATM’s.

Even when the ATM service returns to normal, NAB stands to reap an additional $4.5 million per month from the higher fee it extracts from its 3 million customers.

More About NAB’s ATM fee rise

A new Australian committee has been created to identify potential issues with the new smart cards. The Australian Payments Clearing Association established which is made up of representatives from Visa, MasterCard, merchants, card issuers and card acquires.

APCA sets, manages and develops regulations, procedures and standards governing payments clearing and settlement within Australia.

It will be interesting to see what standard the committee will put in place to help customers make the smooth transition to the Smart Cards.

The days of getting bad reads at the eftpos on your credit cards may be over. That black little magnetic strip will soon be replaced by the VISA Smart Cards.

VISA Smart Cards have been issued to ANZ customers since 2003 and over the next month Westpac and Commonwealth Banks will issue Smart cards to new VISA and Mastercard cardholders.

The Visa Smart cards have computer chips integrated into the credit card which allows more information and offer greater flexibility to both the customer and potentially to the retailers as well, through the use loyalty reward programs.

Though makes you wonder how much information do you really want to have on your credit card? I guess I’ll leave that for another post

more details about the move to the Visa Smart Card can be found here

I was surprised to know that I was worth over $388K, the first thing that came to mind was what can I go and buy HAHAHA.

Well according to the latest report from the Bureau of Statistics the average Aussie is worth $388,500 dollars which is up $17K in the last 12 months, though Aussie still can’t seem to get rid of the nasty credit card debt, which is around the $2990 debt per credit card user.

The report also indicated that Australian’s are smarter with their credit cards and many are paying off the credit cards and limiting their use of the credit card cash advances.

I’d like to think that the new report is a positive step of all Australian credit card holders, that Aussies are now starting to be more smarter with their credit card usage.

Hopefully, in 12 months we’ll be worth more and slowly lose our dependence on our credit cards