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June 06, 2011

  • News:  One Dollar Credit Card 

    Australia's consumer watchdog, Choice is concerned about the recent decision by one of the nation's "big four" banks. The Commonwealth Bank is Australia's first financial institution to jump on the "Jump On It" website to market its credit card brand. A spokesperson for Choice said the agency is concerned that easy money access may be too much of a temptation for some consumers. The agency is worried that it might lure some individuals who would not have the means to repay debt to sign up for a credit card. Furthermore, it would be nearly impossible for someone to fully explore the credit card deal because of the time restraints imposed on group buying which is offered by the website. However, a bank spokesperson said that any individual that jumped on the deal would still have to go through the same procedure and approval process as any other card applicant.

    Jump On It offers one-time deals with such promotions as reduced specials on health and beauty services, dining, groceries, and other consumer services. According to Ingrid Just of Choice, this type of group buying creates a "hype and excitement" that could easily draw people in. Not only is this particular deal specific to obtaining a credit card, but the site also encourages the increased use of card spending with impulse buying. Commonwealth Bank's credit card offer which attracted nearly 600 potential cardholders comes with a $78 annual fee and a higher 13.49 percent interest rate.

    Despite the criticism, Commercial Bank's Marketing Manager Matt Parkes said that the group buying concept is a "novel and unique way" of targeting new business. Many credit card companies are struggling to drum up new business after Australian lawmakers implemented new laws that limit the ways that banks can market their products. The law also prohibits card companies from increasing cardholder's credit limit unless the cardholder personally requested it without being solicited by the bank.

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