Consumers win with credit card changes

17/06/2011

The federal government has introduced four key changes to credit card contracts.

Under the government changes, credit card lenders will be required to allocate repayments to higher interest rate debt first and will also be banned from charging over-limit fees unless consumers specifically agree that their account can go over the limit.

Banned will be the “tick a box” unsolicited credit offers unless the consumer has agreed to receive them.

Lenders will be required to tell consumers the implications of making only minimum repayments.

InfoChoice spokesman Dirk Hofman describes the federal government's reforms as a step in the right direction. “Whether they are truly changing the landscape for credit cards remains to be seen,” he says.

“Some of them are more relevant than others. Of the four reforms, the most meaningful for consumers is the ban on unsolicited credit offers,” Hofman says.

Source: The Australian