CAR0078_ADB659 Credit card

Handling your Credit Card Some practical information and helpful suggestions. Important Information This advice has been prepared without taking into account your objectives, financial situation and needs. Because of that, before acting on the advice, you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs. Electronic Banking services are issued by Commonwealth Bank ABN 48 123 123 124 (Electronic Banking services include Telephone Banking, NetBank, ATMs, BPAY and EFTPOS). A Product Disclosure Statement (PDS) is available for these services by calling 13 2221 (8am-8pm Monday to Friday) or from any branch of the Commonwealth Bank. The PDS should be considered before making any decision about these products. What you need to know and where to find it Handling your credit card Knowing your spending limit Key features of credit cards Protect your funds Using your credit card wisely Using your credit card on the Internet Secure Internet Shopping Handy tips Travelling overseas Payment methods What to do if you cannot make payments Knowing the rules Glossary What to do if you have a complaint or need to contact us 2 3 4 5 6 7 8 8 9 10 11 12 13 15 1 Handling your credit card At the Commonwealth Bank, we pride ourselves on offering financial options best suited to meet our customers’ individual needs. Credit cards are one of those flexible options and we want to make sure you get the most from your card. Read on and we’ll show you how. More and more people are using credit cards to help manage their personal finances. Using credit can be a safe and convenient way to bridge the gap between wanting or needing an item now and paying for it later. However, a credit card can place a burden on you and put your financial future at risk. The aim of this brochure is to provide Commonwealth Bank cardholders with practical guidelines on how to take advantage of the many benefits of a credit card while avoiding any potential pitfalls. You will also find a wealth of information on topics such as different interest options, protecting your funds, using a credit card overseas and over the Internet, and what to do if you are having trouble making payments. By understanding your obligations as a cardholder, you can maximise the benefits of your credit card and minimise the risks. Using credit can be a safe and convenient way to bridge the gap between wanting or needing an item now and paying for it later. 2 Knowing your spending limit One of the golden rules of using a credit card wisely is to establish a budget. By comparing your expenses against income, you can determine just how much you can safely spend each month. When preparing your weekly or monthly budget, make sure you include routine expenses, such as food, rent and entertainment, as well as periodic costs such as insurance, car maintenance, holidays and presents. It is a good idea to include a savings target, for example, 10% of monthly income that can be put towards longer term financial goals, such as buying a car, a holiday or a deposit for a house. A credit card can help you manage your budget by spreading the cost of purchases over time and covering you when you are low on cash. A credit card should be treated as a short term financial tool only and spending should be limited to an affordable percentage of your monthly net income. If you find yourself falling behind with payments, you are most likely overstretched. You will need to reassess your budget and look at areas where you can reduce your expenses. A credit card should be treated as a short term financial tool only and spending should be limited to an affordable percentage of your monthly net income. 3 Key features of credit cards Choosing the right credit card depends on your spending habits and individual requirements. The Commonwealth Bank has two options: Up to 55 days’ interest free period You can select an account with up to 55 days’ interest free on purchases with an annual fee and which, subject to approval, entitles you to membership of the Commonwealth Awards* program, or an account with up to 55 days’ interest free on purchases with a lower annual fee. This option does not include enrolment in Commonwealth Awards. Cash advances attract interest from the date they are made. These types of account are handy if you plan to pay the full balance off each month. If enrolled in the Commonwealth Awards program, you earn one point for every dollar of purchases, transferred credit card balance(s)# and most bill payments charged to your credit card. As with any rewards scheme, you should not go over your planned spending simply to earn extra points. No interest free period This option offers you a lower interest rate and no annual fee. However, interest is payable from the date that a purchase, bill payment or cash advance is made. This type of card may suit people who prefer to pay off purchases over time or use the card for emergency situations. Additional features of our credit cards Other features of credit cards vary, but may include: acceptance throughout Australasia and overseas, emergency card replacement, free transit accident insurance, Balance Transfer Option#, Great Rate option^ for eligible purchases of $1,000 or more (made in one transaction) and an additional card for a family member or friend. The primary cardholder is liable for the debts incurred by the additional cardholder including interest. If the primary cardholder no longer requires an additional card, they should contact the Commonwealth Bank to fully close the additional cardholder’s account. In most cases, you will receive a statement each month that sets out your closing balance, the minimum payment due and the date when it is due. You should always pay particular attention to the due date to avoid being late with your payment. * Commonwealth Awards is only available on Commonwealth Bank Standard, Gold, Platinum and World Vision Visa Credit Cards with the option of up to 55 days’ interest-free only and an annual fee (excludes Ezy MasterCard, MasterCard Affinity, Visa Affinity, Golf Card, all Commonwealth Bank Business Card Options, MasterCard BusinessCard, Capital Business Card, Mobil and Dulux Trade Card). # Conditions apply, see application form for full conditions. 4 Protect your funds While a credit card avoids the need to carry large amounts of money in your wallet or purse, it should be treated with as much care as cash. Remember to always cover the keypad to protect your PIN. If your Commonwealth Bank Credit Card is lost or stolen or you suspect someone else may know your PIN or password, you must report it immediately. In Australia, you can notify the Bank by simply calling 13 2221, 24 hours a day, 7 days a week. You will receive a reference number to verify the time and date of your report. You can also call into any Commonwealth Bank branch during business hours. If you are overseas, you can call into any financial institution displaying your credit card’s MasterCard or Visa sign, or telephone one of the emergency hotlines in the table below. Bankcard – If you are in New Zealand – 0800 44 2240. – If you are in any other country, call the Commonwealth Bank’s Help Desk on + 61 2 9999 3283, 24 hours a day, 7 days a week. Calls to this number are at your expense. MasterCard – If you are in the USA – 1800 307 7309 (Freecall)** In any other country, place a reverse charges call to the USA and quote 1 636 722 7111. Visa – If you are in the USA – 1866 765 9644 (Freecall)** In any other country, place a reverse charges call to Australia and quote 61 2 9251 3704. If you find your card again after reporting it lost or stolen, you must report finding it and not use it again. ^ Conditions apply. Available on eligible credit cards only. Travel or travel related items including accommodation, car hire, tours, airfares, rail fares, cruises, charter hire and travel insurance are ineligible. You must apply for a purchase to be transferred to a Great Rate within 14 days of the date of purchase. If your credit card has an interest free period, all purchases and permitted transactions (other than Great Rate transactions) made after any Great Rate interest free period expires will attract interest at the prevailing standard credit card interest rate from the date of the transaction until the closing balance of a statement is paid in full. ** A free call unless from a mobile phone which will be charged at the applicable mobile rate. 5 Using your credit card wisely Sensible credit card use involves making sure your financial demands do not exceed your income. A credit card is very flexible and convenient, but it should only be considered as a short term financial tool. You should ensure that you pay at least the minimum payment due on your statement by the due date. Any amounts not paid will result in interest charges being made. Therefore the more you pay the lower the interest charges. Missing a monthly payment, as well as being a default under your Conditions of Use, will make it harder for you to catch up the following month. To help keep your payments manageable, a useful guideline is that the average monthly spending on your credit card should be no more than 20% of your credit limit. This would allow occasional special purchases, while keeping your normal payments to a reasonable level. If your payments are becoming unmanageable, you should stop using your card until you get your finances under control. Additionally, if you have more than one credit card, compare how much interest and charges you are paying on each. Amalgamating your cards into one may make managing your debt easier. Read all conditions carefully, as some purchases may in fact be subscriptions resulting in regular charges to your credit card. The Bank monitors all credit cards for unusual spending, and may contact you to confirm transactions processed to your card are genuine. Amalgamating your cards into one may make managing your debt easier. 6 Using your credit card on the Internet If you are planning to shop on the Internet using your card, aim to follow a few simple steps: ■ Only deal with merchants you have a degree of trust in. For example, those with a reputable trading name or brand, or merchants you have previously purchased from over the telephone or in store. ■ Look for the merchant’s contact details on their web site and call them to help you verify their authenticity. Ask friends and colleagues if they have successfully purchased from the merchant previously. ■ Look for a ‘key’ or ‘padlock’ icon at the bottom of your web browser. This will indicate whether or not the merchant’s site offers an encrypted line of communication to protect your details. ■ We recommend you do not send your credit card details via insecure means such as email that is not encrypted. ■ Keep a record of your transactions in case you need to return or exchange an item. This record should include the merchant’s URL (Internet address) and either an order confirmation number or an email confirmation that summarises the price and quantity of a purchase. Print and save a copy of this information. Remember, if a merchant is using low level encryption lines, your personal and card details can still be compromised. ■ Ensure you have the latest anti-virus software installed on your PC. We recommend you use care and caution before providing your credit card and personal details over the Internet. 7 Secure Internet Shopping If you want a more secure way to shop, why not sign up for Secure Internet Shopping. It’s a new service that guarantees to give you added protection against the fraudulent use of your card. Once you sign up for this free service, you can use your Commonwealth Bank MasterCard or Visa Card online at participating merchants with added confidence. All you need to do is enter your security information when buying online. Look out for these logos when shopping at participating merchants. How do I sign up? Signing up is easy. If you’re not already registered for NetBank, you need to do so. NetBank is the Bank’s virtual branch, open 24/7 at commbank.com.au/netbank, or call 13 2828 between 8am and 8pm Monday to Friday (Sydney time). Once you have your NetBank Client Number and Password, simply log on and sign up for Secure Internet Shopping. You can then create your unique Shopping Password and Personal Assurance Message. Now you’re ready to shop online! For full details log on to commbank.com.au/personal/credit/shoppingonline.asp Handy tips Checking your statement – As soon as you receive your monthly statement, you should check all the transactions carefully against your receipts. If there are any charges you do not recognise you should notify the Bank immediately, otherwise you may be held liable for the transaction. However, please remember that some businesses may process transactions under different trading names. Merchants may not bank your transaction for some days, therefore the transaction date on your statement may differ from the date on your receipt. Your Personal Identification Number (PIN) – Your PIN is a confidential number and acts as your electronic signature. Do not disclose this PIN to anyone. If you have difficulty remembering the PIN assigned to your Commonwealth Bank card you can arrange to select your own PIN at any Commonwealth Bank branch. Looking after your card – One of the most common ways a credit card can be damaged is through contact with other magnetic sources. The stripe on the back of a credit card is a magnetic field which stores the card’s account information. Avoid bringing your card into contact with other magnetic items, such as an office ‘Mil’ or ‘blue’ key or a bag’s magnetic clasp, and do not leave a card near a stereo, car speakers or mobile phone. If you carry a number of credit or debit cards in your wallet, it is best to store them uniformly so their magnetic stripes don’t touch each other. In addition, you should protect your card from water damage which will smudge or fade the signature panel. 8 Travelling overseas A credit card makes travelling overseas easy as it reduces the need to worry about converting money into the local currency. However, when using your credit card overseas, you should take care to protect it as travellers are often a prime target for thieves. Be sure to keep sight of your card when making purchases and ensure the transaction is only processed once through the terminal. Whether using your credit card overseas or at home, remember you are only able to access funds up to the amount of your credit limit on any one day, regardless of whether you have deposited extra money into your account. Large transactions, therefore, could be declined regardless of the credit balance of your account. Many travellers use their credit cards overseas to withdraw cash in the local currency. You should note that a cash withdrawal on your credit card account is the same as a cash advance and will attract interest charges from day one. Also, your receipt may indicate the ‘available credit’ and not the ‘outstanding balance’. The Commonwealth Bank recommends you take several payment methods with you when travelling in case you have any problems with your credit card. Please note: Bankcard can only be used in Australia. We recommend you take several payment methods with you when travelling in case you have any problems with your credit card. 9 Payment methods ATM: Use any Commonwealth Bank ATM to transfer funds electronically from your linked cheque and/or savings account to your credit card account. Telephone: Use a touch tone telephone and your password to transfer funds from a linked Commonwealth Bank account to your credit card account by simply calling our automated service on 13 2221, 24 hours a day, 7 days a week. If you need to set up a password, simply call 13 2221 between 8am and 8pm, Monday to Friday, and speak with one of our Customer Service Representatives. Internet: Via NetBank, transfer funds at any time through our 24 hour Internet Banking service. Visit commbank.com.au/netbank to find out more details. AutoPay: Set up an automatic direct debit from your Commonwealth Bank cheque or savings account to pay your credit card each month. Mail: Complete and mail your statement payment section along with your cheque or money order. In person: Pay over the counter or use our Quick Deposit Boxes for cheque payment at any Commonwealth Bank branch. You can also pay your credit card account at Australia Post giroPost outlets. Payments must be made in Australian dollars and within Australia. If you are overseas you will need to arrange for someone in Australia to make payments to your card account or use a touch tone telephone internationally to transfer funds by calling our automated service on +61 13 2221. Why payments are important: By systematically paying your account each month, you will not only minimise interest charges, but establish sound financial habits and a good credit history. It is also a good idea to note the payment due date in your diary so that you do not accidentally miss a payment. If you have an outstanding balance, setting a target date to repay your credit card in full will help you stay on top of your debt. Pay your Commonwealth Bank credit card with a wide choice of convenient methods. 10 What to do if you cannot make payments If you fall behind with your payments, the first step is to stop using your credit card and ask any additional cardholder to do the same. You should also advise the Bank as soon as possible so that it is aware of your situation and can advise you of your options and, if necessary, a payment plan. The next step is to establish a payment plan budget to pay off your debt. You will need to review your original budget and cut back on non-essential items. Take a look at your expenses and recognise the difference between needs and wants. A credit problem will not go away by itself, it will only get worse if not managed. You should not apply for a credit limit increase, use other credit cards or apply for another credit card with another bank. It is also vital that you do not disregard your credit card debt as it could seriously damage your credit history and financial rating. To regain control of your finances, you may need to consider generating income from other sources, such as working overtime or taking on extra part-time work. As well as contacting the Bank, you may also want to contact an independent counselling service for guidance. Establish a payment plan budget to pay off your debt. 11 Knowing the rules When you have a Commonwealth Bank Credit Card, you are bound by a number of legal obligations, set out in the Conditions of Use booklet and the Schedule of Credit Card Particulars. These are provided to all applicants when the Bank makes its offer of finance. This gives you the chance to read and understand your obligations prior to entering into a credit card contract. When you use a credit card to buy something, the Bank is effectively giving you a loan for the purchase amount. Depending on which type of credit card you have, interest may accrue from the day of the purchase or you may have up to 55 days’ interest free. If your card provides you with an interest free period, and you pay the balance in full by the payment due date, you will pay no interest (unless you have had a cash advance, or you have a previous unpaid balance). If you do not pay the balance in full by the due date, you will be charged interest. The minimum payment is the least amount you must pay by the due date. This amount is usually either $25 or 1.5% of the closing balance, whichever is the greater. If your closing balance is less than $25, you pay the whole of the closing balance. When using your credit card you must always adhere to the Conditions of Use. If you do not, the Bank may cancel your card and your credit history could be adversely affected. If, at any time, you cannot find your copy of our Conditions of Use, drop into any Commonwealth Bank branch or simply call 13 2221 between 8am and 8pm, Monday to Friday, and ask for a new copy. The minimum payment is the least amount you must pay by the due date. 12 Glossary Additional Cardholder – a person issued a card on your account at your request. You are responsible for their use of the card. Balance Transfer Option† – you can transfer the full or part balance of your other Australian issued credit card to your Commonwealth Bank Credit Card at a special rate for a specified period. Cash Advance – a withdrawal of cash against your credit card account which attracts interest charges from the day the cash was obtained. Closing Balance – the total amount you owe at the end of the statement period. Conditions of Use – and the Schedule of Credit Card Particulars – these documents contain the terms and conditions applying to the use of your Commonwealth Bank Credit Card and credit card account. Credit Limit – the maximum amount of credit you are able to use. Daily Percentage Rate – the annual percentage interest rate applying to your card account divided by 365. Delinquent – the account status occurring when you do not meet your payment conditions as specified in the Conditions of Use. Great Rate Option# – allows you to pay off eligible purchases of $1,000 or more (made in one transaction) at a discounted interest rate over a specified period. Interest Free Period – a card option that provides you with up to 55 days’ interest free on purchases. Minimum Amount Due – the minimum amount you have to pay by the payment due date each month. Monthly Payment – the amount you decide to pay each month. Monthly Statement – a statement sent to you each month which includes details of transactions, interest charges and fees, your closing balance, the minimum amount due and the payment due date. All information quoted is current as at 1 March 2004. † Conditions apply, see application form for full conditions. # Conditions apply. Available on eligible credit cards only. Travel or travel related items including accommodation, car hire, tours, airfares, rail fares, cruises, charter hire and travel insurance are ineligible. You must apply for a purchase to be transferred to a Great Rate within 14 days of the date of purchase. If your credit card has an interest free period, all purchases and permitted transactions (other than Great Rate transactions) made after any Great Rate interest free period expires will attract interest at the prevailing standard credit card interest rate from the date of the transaction until the closing balance of a statement is paid in full. 13 continued Glossary No Interest Free Period – a card option where interest is calculated from the date a purchase, bill payment or cash advance is made. Payment Due Date – the date by which you must pay the minimum amount. Permitted Transaction – a card transaction you authorise a merchant to debit to your card account. An example would be authorising a car rental company to complete a transaction for additional costs such as parking fines or damage. 14 What to do if you have a complaint or need to contact us How to contact us You can contact the Commonwealth Bank: ■ ■ ■ ■ by telephone on 13 2221 between 8am and 8pm, Monday to Friday; in writing, addressed to GPO Box 2719, Sydney NSW 1155; through our web site commbank.com.au; or in person at any of our branches. If you have a complaint Contact your branch or call 13 2221 between 8am and 8pm, Monday to Friday. Our staff will either deal with the matter personally or refer the matter to the appropriate person. If the matter is not resolved to your satisfaction, please contact our Customer Relations team: ■ ■ ■ ■ web site at commbank.com.au/contactus/comment.asp telephone 1800 805 605; facsimile 1800 028 542; or writing to: Customer Relations, Commonwealth Bank Group, Reply Paid 41, Sydney NSW 2001 Customer Relations aim to resolve most issues within four working days. However, some matters are more complex and can take longer to resolve. If that is the case, we will keep you informed of our progress. If, despite our best efforts, you believe your complaint has not been satisfactorily dealt with, you may wish to contact an external dispute resolution scheme. The Banking and Financial Services Ombudsman is an impartial, independent and free dispute resolution scheme, but you must have first given us the opportunity to review your case. You can contact the Ombudsman by: ■ ■ ■ ■ telephone on 03 9613 7333 or 1300 780 808; facsimile 03 9613 7345; web site www.abio.org.au; or writing to: Banking and Financial Services Ombudsman, GPO Box 3, Melbourne VIC 3001 15 Notes 16 8am-8pm Monday-Friday commbank.com.au ADB659 1104 Commonwealth Bank of Australia ABN 48 123 123 124