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Credit Card Reforms: No unsolicited credit limit increase offers

Information verified correct on December 6th, 2016

Say goodbye to credit limit increase offers - unless you’re into that sort of thing.

Key points

  • Your lender will not be able to contact you offering a credit limit increase unless you first tell them that you want to receive credit limit increase offers.
  • You will have to approach the bank when you think you need an increase in your available credit.
  • This reform applies to all credit card contracts.

The up-sell

At some stage in your life, you would have heard the famous fast-food up-sell, ‘Would you like fries with that?’

What’s your immediate reaction? Suspicion, or a flat no perhaps?

It’s no different with your lender. Credit providers may have dropped the catch phrase, but the intention's the same: provide customers with a greater credit limit than they already have to maximise the amount of interest that can be earned off a particular customer.

The reform

credit card increaseAlthough you are the only person who can agree to a credit limit increase, lenders can send out repeated requests to try and get you to increase your limit. Changes to the ‘National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011, mean that you will have to agree to receive these offers first.

The government has done this because it believes that unsolicited credit limit increase offers allow individuals to obtain credit more easily, and leads to increased instances financial stress and hardship among Australia's most vulnerable credit card users.

Banks and lenders argue that offers are only sent out the people who have been assessed and pre approved for a credit limit increase according to their systems and initial assessment made during the application process. But arguments aside, the days of the bank haranguing customers to increase their credit limits are gone.

What does this mean for you?

You will have more control over the amount of available credit on your card. You will no longer be a passive recipient of credit increase offers, you must now make the call about when you feel you need more credit.

Gabby's story

We got in touch with Gabby, a Credit Card Finder user, and got her to tell us about one of the times she received an unsolicited credit limit increase offer. This is what happened.

Not that long ago I was contacted by ANZ, it was a bit weird because they called me and asked if I wanted to increase my credit limit.ANZ: 'A bit strange and a little bit annoying.'

At the time I had a credit limit of $5,000 and they wanted me to increase this to $8,000.

I said to them, "I’m not interested". Then they said, "We can increase by a lesser amount." I said, "Oh, o.k. increase it by a $1,000". But then I got the letter in the mail tell me it had been increased by $3,000 to $8,000. They even said in the letter, "Even though it’s not what you said you wanted."

So, I thought what’s the whole point of the phone call if they were going to give me the highest amount anyway? And, I didn't do anything about it because to be honest, to call them and complain wouldn’t have been worth my time. It was a bit strange and a little bit annoying: but that’s ANZ.'

'I think it’s definitely a good idea that people should only be contacted to have their credit limit increased if they agree to it first.’

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Jacob Joseph

Jacob is a writer and video journalist with finder.com.au. Credit cards, personal loans and savings accounts are his bread and butter, and he likes nothing more helping people understand the sometimes overly complex world of personal finance.

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