Warning over sky-high interest rates for dual currency credit cards

The consumer watchdog is warning of a huge disparity in the interest charged for dual currency credit cards, rates for which can rise above 40 per cent a year for users who fail to pay on time.

The alert comes after the Consumer Council looked at eight credit cards issued by seven companies that can be used to spend and pay in yuan and Hong Kong dollars.

Purchases made in Hong Kong and on the mainland are listed in separate accounts on the same statement, to be settled in the respective currencies.

For retail purchases, the annualised percentage rate - the amount a consumer would pay to borrow the money for a year - can vary from 16.08 per cent to 34.49 per cent.

'Card issuers have a responsibility to disclose the effective APR and card holders should make sure they know the APR before using the card,' Ambrose Ho Pui-him, chairman of the council's Publicity and Community Relations Committee, said yesterday.

All the cards in the study charge the same rates for spending made in the two currencies, except for one which charges 16.08 per cent to 29.33 per cent for Hong Kong dollars and 19.86 per cent for yuan.

Where the rates begin to soar is for cash advances. For yuan, the cards impose an APR ranging from 20.53 per cent to 37.52 per cent plus a handling fee ranging from 3 to 4 per cent of the loan. For Hong Kong dollars it ranges from 22.98 per cent to 36.76 per cent.