What happened during the Australian credit card reforms
From credit limit increases to card cancellations, here’s what changed with the credit card reforms in 2018 and 2019.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
To make it easier for people to manage their credit card account and credit limits, the Australian government rolled out four credit card reforms to protect cardholders in the 2018/2019 financial year. These changes kicked in with a ban on credit limit increase invitations from banks on 1 July 2018 and also impacted how cardholders can cancel their cards, change their credit limits and are charged interest.
To help you understand how these credit card reforms impacted Australians and when they were introduced, check out the table below.
|Ban on credit card limit increase invitations||Card card issuers can not contact customers to offer credit limit increase invitations. This includes all forms of communication (including email, phone and in-branch). This applies even if customers have previously provided consent to receive these invitations.||1 July 2018|
|Credit card limit assessments||If you’re applying for a new credit card or requesting a credit limit increase, the card issuer must assess your application based on your ability to repay the entire credit limit within a three-year period.||1 January 2019|
|Online card cancellations||Credit issuers must give customers the option to cancel their accounts or reduce their credit limits online. When a customer makes a request, the credit issuer must take reasonable steps to help the customer meet their request. This means that card issuers can no longer offer contrary suggestions when you’re trying to close your account or reduce your credit limit.||1 January 2019|
|Ban on back-dated interest charges||Since 1 January 2019, Banks and credit card providers can not retroactively charge interest on credit card balances. This impacts the interest-free days feature many cards offer. Previously, if you didn't pay the full amount listed by the due date on your statement, interest would be back-dated based on when purchases were made.||1 January 2019|
How will these changes affect you?
These reforms amend the National Consumer Credit Protection Act 2009 and are designed to protect cardholders from predatory and irresponsible lending.
Previously, the 2012 credit card reforms stopped card issuers from making unsolicited credit card limit increase invites. So cardholders had to opt to receive credit limit invitations either at the time of applying for the card or by contacting their bank directly. Opting out of these invitations didn’t stop banks from contacting cardholders electronically or over the phone.
However, since 1 July 2018, credit issuers can no longer invite cardholders to increase their limit over any form of communication and the consent exemption has been removed. If you have assessed your finances and decided you do need to increase your credit limit, you’ll need to contact your bank to do so. You can check out our guide to increasing your credit limit for the steps you’ll need to take.
The stricter eligibility assessments during the application approval process could also impact how much credit you can access. This means that you may be approved for lower credit limits than you have been in the past. This is especially important to remember if you're planning to apply for a balance transfer. If you get approved for a credit limit that's lower than the balance you're transferring, the remaining amount will stay in your old account and continue to collect interest. You can see our in-depth guide to how the new credit card rules will affect you in 2019 for more information.
Picture: ShutterstockBack to top
More guides on Finder
Finder’s RBA Cash Rate Survey: 60% of experts blame BNPL for drop in credit cards
Credit cards are being used less and experts say Buy Now Pay Later services such as Afterpay and Zip are to blame, according to new research from Finder. In this month's Finder RBA Cash Rate Survey™, 39 experts and economists weighed in on future cash rate moves and other issues related to the state of the Australian economy.
Kogan Money Black Card – Exclusive Offer
Pay 0% interest on balance transfers and get a $50 Kogan.com Credit with a new Kogan Money Black Card.
0% Balance Transfer Credit Card Offers
Pay no interest on your credit card debt and clear it faster with a 0% balance transfer credit card. Compare and apply here.
ANZ Rewards Platinum Credit Card – Exclusive Offer
The ANZ Rewards Platinum Credit Card offers a competitive rewards program, $0 annual fee for the first year, a $500 gift card, a balance transfer offer and a range of complimentary insurance covers.
What does it mean for you if we’re no longer in a recession?
The recession is apparently over – but what does this actually mean for your money, and what impact does it have on your savings, loans and investments?
Financial Fitness Challenge Week 3: How to get the most out of a credit card
How to cut debt and make your credit card work for you.
Credit card woes: Where do Aussies turn if they can’t pay off their plastic?
Only half of Australians who find themselves buried under out-of-control credit card debt could dig themselves out, according to Finder.
Over the limit: Pandemic pushes 2 million Aussies beyond credit means
Soaring unemployment and wage cuts have seen people increasingly overdrawing their credit cards, according to Finder, Australia’s most visited comparison site.
How will proposed “simpler credit” rules affect Australian borrowers?
The federal treasurer has announced plans to make it easier to get credit cards, home loans and personal loans. But it's borrower beware.
COVID-19 credit crunch: Two million Australians over their credit card limit
Finder survey shows coronavirus is leaving millions of Australians at risk of credit card delinquency.
Ask an Expert