Coles' Pumped-up Fuel Deal Under Fire
The Age
Saturday June 4, 2005
COLES Myer will double its fuel discount to 8 cents a litre temporarily, and then 6 cents permanently for holders of its credit card, in a move criticised by consumer groups and the State Government. The national scheme marks the first time cheap fuel has been linked to a credit card, and consumer groups yesterday said it could encourage people to acquire more credit cards and increase their credit card debt. "It's always a concern when there are incentives for people to pay by credit card rather than use other forms of payment," said Consumer Credit Legal Centre manager Carolyn Bond. Ms Bond said the 18.5 per cent interest rate on the Coles Myer Source MasterCard was high. "When they push this sort of stuff, it really takes people's eye off the actual cost of the credit and makes them think of the rewards," she said. Each Victorian has an average credit card debt of $2570. Consumer Affairs Minister Marsha Thomson also urged caution. "As with any credit card, you need to be careful about how much it will really cost you. While in this case it may offer attractive discounts, it also has an interest rate which is higher than some others in the market," Ms Thomson said. Australian Consumers Association finance policy officer Catherine Wolthuizen advised consumers to shop around for the most suitable product. "That discount can pretty quickly get eaten up by high interest and other charges attached to the credit card," she said. The chief executive of credit reporting company Dun & Bradstreet, Christine Christian, said the total amount owing on credit and charge cards was $30.21 billion in December 2004 - up from $5.62 billion 10 years earlier. But Coles Myer chief executive John Fletcher said the card was a good deal for consumers. "Most people would have two or three credit cards in their wallet but this is as much about saying if you are going to have a credit card, use ours," he said. There are 900,000 Coles Myer Source MasterCard customers nationally, a figure Mr Fletcher said he hoped would increase to 1.2 million within a year. HOW IT WORKS ? Existing holders of a Coles Myer Source MasterCard will get eight, 4 cent-discount vouchers in the mail with their next statement. These are valid for three months and can be used with the 4 cent supermarket docket. ? New customers will receive eight, 4 cent discount vouchers valid for three months once they apply for the card. ? After the 4 cent vouchers expire, customers with the Coles Myer card will get 2 cent discount vouchers in the mail with their statements, when they spend $30 or more per transaction on their credit card. There is a maximum of four vouchers per month.
© 2005 The Age
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