Credit cards are an integral part of Australian families but can negatively impact family budgets. Credit card operators have been free to impose unrealistic rules for a long time however, legislation was introduced into Parliament today to reform credit card regulations and give Australians a better deal at last.
The credit card reforms include:
- Requiring credit card lenders to allocate repayments to higher interest debts first
- Preventing lenders from charging over-limit fees unless consumers specifically agree that their account can go over the limit
- Banning ‘tick a box’ unsolicited credit offers unless the consumer has agreed to receive them
- Requiring lenders to tell consumers the implications of only making minimum repayments.
- Outlawing price signalling by banks designed to undermine competition and push interest rates higher.
The ACCC has advised there’s strong evidence that banks have been signalling increases in mortgage rates to their competitors. Obviously the big banks won’t welcome tougher regulation, but the ACCC will be given the powers it needs to protect the interests of Australian consumers. These reforms are one part of the Competitive and Sustainable Banking System package designed to empower consumers to get a better deal, assist smaller lenders put more competitive pressure on the big banks, and to secure a sustainable flow of credit to households and businesses.
