Australia Passes New Credit Card Regulations

Post by Sharat on March 7, 2018 · Under credit cards · Comments Off on Australia Passes New Credit Card Regulations 

Recently the Australian parliament passed laws designed to improve consumer protection as the government seeks to mitigate against rising national credit card debt. The Federal parliament effectively banned credit card issuers and banks from making unsolicited credit limit increase offers to their customers. From January next year lenders will also be required to allow their customers to make changes to their credit limits or cancel their credit cards online.

Protecting Australians

Michaelia Cash, Minister for Jobs and Innovation in her address to parliament during the debate said the reforms would protect Australians that are vulnerable to incurring debt and increase competition in the market for credit cards. The new laws enacted by parliament came shortly after ANZ and Westpac were both for forced to reimburse approximately $21 million to their customers after an investigation by the regulator found that both lenders had been inappropriately raising credit limits.

Credit card interest rates are high

According to the Australian Securities and Investment Commission (ASIC), the total amount of credit card debt held by Australians is a little more than $33 billion. The average borrower holds about $4,278.19 of credit card debt which incurs $705 in interest every year. Whilst credit cards are both convenient and useful, offering to raise credit limits can end up costing Australian borrowers over the long run, particularly if those borrowers carry a balance.

Get out of debt as quickly as possible

Owning a credit card makes it easy for people to spend beyond their means. That is why it is really important that card holders sit down and develop a spending budget. If you do find that you are in debt you need to begin the process of dealing with immediately. Perhaps the best option of achieving this goal is applying for a balance transfer card which will enable you to pay off your balance gradually without incurring interest charges.

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