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CommBank is no longer combining credit card and mortgage applications



Applications for loans will now be analysed separately in a push for responsible lending.

In the last few days, Commonwealth Bank has announced some new changes to help tighten its lending policies. The bank contacted mortgage brokers last week to confirm that it will no longer bundle home loan and credit card applications together. Customers still have the choice of applying for a new credit card and a mortgage at the same time, but the bank will now assess the requests individually.

Rather than approving your credit card based on your home loan application, CommBank will now review the applications separately to ensure that you can afford both before approving each product.

The benefits of a bundled mortgage and credit card package are usually the convenience of the simultaneous application, managing your debts under the same institution and waived annual fees for the credit card. However, the new individual application method will ensure that CommBank applicants are actually eligible for the two separate lines of credit before they are approved.

The bank has also ditched its “highest income earner” policy. If you’re applying for a joint application as a couple, CBA will assess each applicant by their individual income and liabilities as well as their shared living expenses.

While it may seem convenient to request a credit card while you’re applying for a mortgage, you should always do your research before applying. Make sure you’ve weighed up whether or not you actually need a credit card rather than just applying for one “just in case”. If you do require a line of credit, compare your options based on annual fees, interest rates, eligibility requirements and credit limits. This is important as you may find that you’re better off applying for a credit card with another bank.

CommBank has introduced these internal changes to demonstrate its move towards more responsible lending, but it's not the only stakeholder that has expressed its concern for more ethical credit card practices.

In June, treasurer Scott Morrison released a manifesto detailing four policies that he planned to implement to reduce irresponsible lending and to help reduce nationwide credit card debt. Some of these proposals included higher minimum repayment amounts, stricter application assessments and easier credit card cancellation.

ME is another lender that has been very vocal in the conversation around credit card lending, claiming that we should be going even further than Morrison’s proposals to help Aussies better handle their credit card debt.

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