Aussies are living in prosperous times and are enjoying their strongest spending power for decades, a new study has suggested.

CommSec said its National Performance Gauge – which measures a range of factors including income per head, retail spending per head and consumer confidence – stood at a record high at the end of 2009 and rose by four per cent over the course of the year, the Australian Associated Press reported.

The study – which may serve as encouragement to Aussies who wish to compare credit cards and engage in a shopping splurge – also found that car affordability is the strongest it has been in 35 years.

It now takes a person on the average wage just under 30 weeks to buy a new Ford Falcon, down from 36 weeks five years ago.
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Westpac is set to charge interest on existing interest charges and credit card fees.

In a letter to its credit card holders, the bank said that from June “interest will also apply to interest charges and fees on your credit-card account”, the Daily Telegraph reported.

Westpac defended the change by saying it would simply bring the bank into line with industry standards.

However, Choice spokesman Christopher Zinn said the move was “sneaky”, adding that the decision of the major banks to charge interest on interest would make it harder for customers to compare credit cards.

“This is one of those things that makes it very hard to compare cards and know what the interest rate is.

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Australian banks are charging excessive fees and interest on credit cards and are failing to meet the more customer-friendly standards that exist in the UK, it has been suggested.

A study by the consumer advocate group Choice noted that the British prime minister, Gordon Brown, recently announced measures to prevent credit card companies from using some of the “sharp practices” that cause consumers to get into debt.

However, it argued that most of the practices to be outlawed in the UK are standard practice for Australian financial institutions.

Choice said some of the key UK changes included bans on unsolicited credit limit increases, reforms that empower consumers to reject interest rate hikes and rules to ensure better disclosure of fees and charges.

The study comes after Westpac came in for criticism this week for introducing new interest charges on existing credit card interest and fees.

Federal treasurer Wayne Swan said the move would encourage customers to compare credit cards in search of better terms, adding: “There are other credit cards that don’t charge interest on fees and no doubt many Westpac customers will be considering those today.”

New government legislation to improve consumer rights would not stop credit card companies from imposing excessive fees on their customers, it has been suggested.

Under a national consumer law to be implemented next year, banks and other financial institutions will face tougher rules over unfair contract terms.

Successful prosecutions will be made where credit card providers are found to have failed a fairness test.

Speaking to the Sydney Morning Herald, Nicole Rich, the director of policy and campaigns at the Consumer Action Law Centre, claimed that high fees are often a ’’surrogate for raising the interest rate” and cast doubt on whether the legislation would be strong enough to truly challenge lenders.

’’The [new] law allows you to challenge unfair contract terms but the law isn’t entirely clear about whether this sort of thing is an unfair term,” she added.

Ms Rich said Westpac’s recent decision to charge interest on existing credit card interest would encourage Australians to compare credit cards in search of better offers.

This week, a study by the consumer advocate group Choice claimed that Australian credit cards and are failing to meet the more customer-friendly standards that exist in the UK.

Debt stress is on the rise in Australia and is now back to September 2008 levels, a new report has found.

According to Veda Advantage’s bi-annual Australian Debt Study, 82 per cent of Australians are worried about their ability to repay debt over the next 12 months – up from 76 per cent in September 2009.

In addition, the study, which was carried out by Galaxy research, revealed that one in seven Australians have missed a minimum bill repayment in the past three months. Of

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