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Wizard Home Loans accused of credit card 'magic tricks'

Date Published : Wednesday, September 03, 2008

Mortgage lender Wizard Home Loans has upped interest rates on its main credit card by 2.75 per cent, according to reports.

The Herald Sun claimed that earlier this week the group received applause for announcing it would reduce its home loan rate before the Reserve Bank of Australia's official cut.

However, the publication claimed that although Wizard was very vocal about its home loan rate cut, it was surprisingly quiet regarding the rise on its flagship credit card.

Speaking to the newspaper, Christopher Zinn, a spokesperson for the Australian Consumers' Association, said Wizard - along with a number of other lenders - were emitting mixed messages about their products.

Mr Zinn said that it is easy to see why customers get "befuddled by the pricing decisions of lenders".

"It would be interesting to see Wizard pull an explanation out of the hat on why they have decided to increase rates on credit cards by so much," he added.

According to the Herald Sun, a Wizard spokesperson said the hike was required in order to keep fees down.

In May, it was announced that GE Money was considering strategic options for Wizard, including a partnership, joint venture or even a possible sale.

GE Money Australia & New Zealand president and chief executive officer Mike Cutter said: "Rather than change the Wizard proposition that has propelled it to the position of Australia's leading non-bank home lender, we will review alternatives that will allow Wizard to continue to provide Australian borrowers with competitive products and finance solutions based on its current business model."

At its board meeting on September 2nd, the Reserve Bank of Australia lowered the cash rate by 25 basis points to seven per cent.

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