(12 July 2011 – Australia) From July next year credit card providers will be banned from charging fees if a customer exceeds their credit limit.The new laws are designed to help people reduce the level of fees and interest they are charged and lower the risk of being given unrealistic credit card limits they may be unable to pay.
It will be mandatory for credit providers to include in credit card application forms information about the annual percentage rate.
Credit providers are also prohibited from making unsolicited offers to increase credit card limits.
Under the new laws, when a person makes a payment on their credit card the repayment must go to the part of the balance of their credit card on which they are charged the highest interest rate, unless a consumer specifically elected to have a different payment arrangement.
Banks and mortgage lenders must provide borrowers with a fact sheet from September to enable them to easily compare home loans.
The Government says the changes mean credit card providers face reduced revenue from charging higher fees if customers exceed their credit limit.