Fitness First pays weighty fine for scaling up surcharges

Fitness First pays weighty fine for scaling up surcharges

Fitness First Australia, part of the international fitness brand which runs 61 centres around the country, has had to pay a $12,600 penalty fee, as a result of allegedly charging excessive surcharges on direct debits from their customers.

Under the Competition and Consumer Act 2010, as stated by ACCC Deputy Chair Mick Keogh, businesses that charge flat rate fees on their EFTPOS, credit and debit cards, “must ensure the surcharge amount does not exceed their cost of acceptance for any given transaction”.

Fitness First’s flat rate fees, according to the ACCC, equated to a 1.09 per cent charge on a $46 fortnightly membership, its “Passport” membership rate. Processing costs of the debit payments, however, were only 0.81 per cent of the transactions.

“Businesses charging excessive payment surcharges, intentionally or not, do so at the risk of breaching the Competition and Consumer Act. The onus is on businesses that choose to impose surcharges to get it right,” Mr Keogh said.

Fitness First has since reviewed and amended its surcharging practices and was notably cooperative with the ACCC’s investigation. Keogh says that it is “often” the case that, on smaller transactions, surcharges enforced by businesses can become excessive.

This is the fourth time the ACCC has taken action against businesses for breaching the Competition and Consumer Act. It acts as a warning to other businesses that, like Fitness First, if you overrun your charges, you could end up having to foot the bill.

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Learn more about credit cards

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

Are credit checks mandatory?

In Australia it is impossible to get a credit card without the provider performing a credit check first. This is for your benefit, as it helps to prevent you from falling into avoidable debt.

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.

How do you pay off credit cards?

The best way to pay off a credit card bill is to set a realistic spending budget and stick to it. Each month, you’ll get a credit card statement detailing how much you owe and how long it will take to pay off the balance by making minimum repayments. If you only make the minimum repayments, it will take you years to pay off your outstanding balance and add extra costs in interest charges. To avoid any extra charges, you should pay the entire bill. 

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

How does the ANZ credit card instalment plan work?

While you usually need to settle all or part of your credit card dues at the end of your statement period, some credit cards afford you the option of setting up instalment plans. This allows you to settle your credit card debt at a pace that's more convenient for you, paying a fixed amount over a fixed period, thus making it easier to budget your repayments every month.

With the ANZ credit card instalment plan, you can set up a structured repayment schedule for part or all of your balance, or even for specific purchases over a certain value.

Some of the benefits of instalment repayment include: 

  • Structured repayments: You’ll have a fixed sum to pay each month.
  • Easier to budget: A fixed repayment sum makes it easier to make your monthly budget.
  • Account benefits: You might also get benefits such as discounted interest rates or debt-tracking tools.

There are disadvantages of opting for instalment repayment, however, and they include:

  • Less flexibility: You will not be able to pay a smaller amount once you set an instalment plan.
  • Different interest charges: In case the instalment plan only covers part of the balance, different interest charges could apply, making it challenging to budget.
  • Additional fees: You might have to pay fees or penalty charges in case of missed payments.

How does the Commonwealth Bank credit card instalment plan work?

Commonwealth Bank credit card instalment plans allow you to structure the schedule for repaying your outstanding credit card balances. So, rather than pay the entire amount on the due date, you’ll pay a fixed amount on every due date for a particular period.

You can choose from three types of plans. The first is to pay-off a one-time large purchase exceeding $100 made during the previous 14 days. The second plan is to pay off the credit card balance (excluding cash advance, balance transfers, and existing instalment plans) of $600 or more in whole or part over a predetermined period. The last plan allows you to pay off the cash advance balance of $600 or higher in part or fully, over a certain period.

You can break down large purchases into affordable instalments over some time that you specify. Additionally, you enjoy the flexibility to cancel or prepay the plan before its last instalment. You can simultaneously have ten active plans without additional credit checks on all eligible cards.

Once you select the eligible purchase or balance and the desired repayment term, the monthly instalment and due date are shown in the next statement, which includes the new payment and the summary of the plan’s progress. In case you miss a payment, the plan isn’t cancelled, but an unpaid instalment is re-transferred to the applicable balance, and you’ll be charged the standard rate. The plan can be revoked at any time, and the outstanding amount is added to the cash advance or purchase balance as applicable.

Where can I get a credit card?

Looking to get your first credit card? You might be confused as to exactly where to go to apply for one. Here’s where to go when you are ready to put in that application.

The bank: Your bank is a great place to start, provided that you have a good banking history. Since you already have a financial history, you have more chance of your application being approved.

Credit card provider: Another option is to apply for a credit card directly from the issuer, such as Visa, Mastercard or Amex. This will most likely be an online application, so do your research and apply for a suitable card for your circumstances.

Major retailers: Coles, Woolworths, Myer and David Jones all have credit cards available. But watch out for the interest rate and annual fees – these cards are designed to help you spend more in store.

How to calculate credit card interest

Credit card interest can quickly turn a manageable balance into unmovable debt. So being able to understand how interest rates translate into dollars is an important skill to acquire.

The common mistake people make is focusing on the credit card’s annual percentage rate (APR), which often sits between 15 and 20 per cent. While the APR does provide a rough idea of how much interest you’ll pay, it’s not entirely accurate.

This is because you actually accrue interest on your balance daily, not annually. So, you need to work out your daily periodic rate (DPR). To do this, divide your card’s APR by the number of days in a year (e.g. 16.9 per cent divided by 365, or 0.05 per cent). You can then apply this figure to the daily balance on your credit card.

How to get a free credit card

There's no such thing as a free lunch. All credit cards come with associated costs when used to make purchases, even if it’s simply the cost of making repayments.

However, many lenders offer incentives for customers such as a $0 annual fee or 0 per cent interest on purchases during an introductory period. Additionally, paying off your balance in full during an interest-free period means you could only have to pay back the cost of purchases without interest. You could also be eligible for additional rewards such as cashback during that time, saving you more money.

How to increase your Heritage credit card limit?

Heritage credit card holders can increase their card limits, and typically without any hassles. There are two limits applied to your credit card: your account transfer limit and your credit card limit, each of which has a separate limit.

To increase your Heritage credit card limit, you can contact Heritage on 13 14 22. Unfortunately, you cannot opt to increase your credit card limit online due to security reasons. 

You can, however, request to increase your daily account transfer limit and BPAY® to up to $40,000 per day easily through Heritage Online. To do this,  you'll need to first ensure that your credit card limit is more than $40,000. If it is lower, you’ll need to first ask Heritage for an increase in your credit card limit. 

  • It’s important to note that once you change your credit limit, the daily periodic rate and corresponding annual percentage rate will change as well. This is likely to come into effect on the first day of each billing cycle that begins in March, June, September, and December. The effect of an increase in the annual percentage rate and the daily periodic rate will lead to an increased amount of interest you will have to cover in your monthly payment. 

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

How do I increase my Virgin credit card limit?

If you’re a Virgin Money cardholder and you’re looking at increasing your credit card limit, the first step is to get in touch with Virgin’s credit team on 13 37 39. 

Once you request a Virgin Money credit card limit increase, the lender will do an assessment of your current financial position to make sure you can repay the credit. Virgin Money will typically take 7 to 10 working days to complete this process.

Virgin Money has strict terms around credit increases. To be eligible, you must have opened your account no less than nine months before making the application. Also, at least six months must have passed since your last credit limit increase. The maximum increase you can expect will be 50 per cent of your existing credit limit.

What is the lowest monthly repayment on my credit card?

As a rule of thumb, this tends to be around 2-3 per cent of the outstanding balance. You can choose how much you want to repay each billing period as long as it is higher than this minimum required amount.