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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.

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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.

ReformDetailsDate
Ban on credit card limit increase invitationsCard 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 assessmentsIf 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 cancellationsCredit 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 chargesSince 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: Shutterstock

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Credit Cards Comparison

Updated April 9th, 2020
Name Product Purchase rate (p.a.) Balance transfer rate Annual fee
Coles No Annual Fee Mastercard
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0% p.a. for 18 months with 1.5% balance transfer fee
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Earn flybuys points for your spending and save with an ongoing $0 annual fee and 0% p.a. on balance transfers for 18 months.
Qantas American Express Ultimate Card
20.74% p.a.
$450 p.a.
Get 100,000 bonus Qantas Points, a $450 Qantas Travel Credit and 2 yearly complimentary Qantas Club lounge invitations. Ends 14 Apr 2020.
HSBC Platinum Credit Card - Balance Transfer Offer
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Enjoy a balance transfer offer, yearly annual fee refund, airport lounge passes and complimentary insurance covers.
Bendigo Bank Low Rate Mastercard
11.99% p.a.
0% p.a. for 18 months with 2% balance transfer fee
$45 p.a.
A no-frills credit card with a competitive annual fee and 0% p.a. interest rate on balance transfers for the first 18 months.
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* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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