Over credit card limit rules changed

The National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011 became law this week.

The most controversial part of the amendment deals with over-limit credit card spending. The rules are that the card issuer must notify the consumer if a card is used in excess of its limit.

Credit providers are prohibited from imposing any fees or charges, or a higher interest rate, on consumers who go over the limit, unless the consumer has previously consented to this.

On the issue of credit limit increases, card issuers must not make limit increase offers, except where they have obtained the express consent of the consumer to do so.

The consumer may withdraw this consent at any time. The credit card issuer must keep a record of these consents.

Source: Banking Day