Originally published February 20 2005
Credit card companies use gimmicks to lure young consumers; cards rarely have low interest rates
by Mike Adams, the Health Ranger, NaturalNews Editor
Credit card companies are now using multi-colored and oddly shaped credit cards in order to lure young consumers to sign up for their credit cards. By offering these cards as novelties and fashion statements, companies are able to sign up young, inexperienced consumers who will not check the often high interest rates on these new cards.
The Australian Consumers Association says the flood of multi-hued, oddly shaped credit cards are being used to draw in younger consumers who might not realize the cons of owning a credit card.
"We're asking people not to be drawn in by fancy-colored credit cards, but to compare rates and really think about whether they need a credit card," Wolthuizen says.
Last week, the National Australia Bank launched its Visa Mini, a card half the size of regular credit card that comes in five colors.
"Mini Me" Verne Troyer, star of the Austin Powers movie series, was in Sydney to launch the product.
NAB personal loans manager Andrew Maitland says the Visa Mini, part of a range of products aimed squarely at young people, includes a generous $10 cash-back reward every month.
"With its choice of colors and new size the Visa Mini appeals to the young-at-heart and style-conscious customer who also wants the benefits of $10 cash back automatically credited to their account each month," Maitland says.
"Our market research has shown this simple cash-back offer, crediting money directly into customers' accounts, is very attractive to the young adult market."
But Mini Visa comes with a hefty catch - it has one of the highest interest rates of all cards at 16.95 per cent.
Virgin Money has also launched a card that comes in five colors and has a rounded design but has an interest rate of 12.4 per cent.
"There's a huge number of (credit) cards in the market now with no annual fee and low rates as well," Orrock says.
Info choice figures show that among the best cards are Suncorp's Clear Options card, with an interest rate of 11.9 per cent, St George's Visa SLSL (10.99 per cent) and HSBC's Low Rate Credit Card (10.49 per cent).
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