Reforms in credit card limits put banks on the edge "

Reforms in credit card limits put banks on the edge "

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City spokeswoman Michelle Hutchison said it is clear that credit card providers were on the edge tina the law. Image: File class = “image-source”> Source: AdelaideNow

Banks aim to lure customers into upping credit limits

laws prohibiting the practice comes into force on 1 July

“It is clear that credit providers are on the edge”

tina messages that aimed at attracting clients upping their credit limits before the law prohibiting the practice becomes effective on July 1.

HSBC, Bank West, ANZ and Commonwealth Bank are among those that require customers via SMS, internet bank accounts or post to consent to receive invitations to increase their limit in the next financial year and beyond.

An ANZ spokesman said. “We believe these changes will have an impact on our business, but it is too early to say how big the effect will be” />
Bank has launched several campaigns to market advice to clients changes and give them the opportunity to choose for the future growth tina credit, a spokesman said.

A BankWest spokesperson confirmed that the bank has contacted “a select number tina customers who qualify for the credit increases to alert them to future reforms that may affect the day-to-day their bank.”

According to the Federal Government changes, banks will be prohibited from sending tinafers to increase your credit limit if the customer consents. Cardholders can still apply for an increase at any time. Tags: Over limit fees will also be banned under the reforms, if new clients specifically agree to it.

spokeswoman for the financial comparison website Rate Michelle Hutchison said the city is clear that credit card providers were on the edge tina the law.

“Reforms tina credit can affect their income and some card providers are doing everything they can to protect it,” Ms. Hutchison said.

Banks made about 1 billion dollars annually in fees over time according to Reserve Bank figures and nine personal credit cards have increased their annual fees since October 2011, she said.

“We have also found over a third tina personal credit card that tinafers a balance transfer to reduce their initial prices, which may be an attempt to lock in customers before the changes are in place July 1, “she said.

Earlier this year the Australian Securities and Investments Commission found Commonwealth Bank had misled consumers in December 2011 suggesting cardholders will miss the chance to increase their limit if they disagree.

A Commonwealth Bank spokesman said the bank supports the government’s reforms as “financial institutions secure sufficient loans and do not put customers in a position where they can not meet its financial obligations.”

“Even if these reforms will not begin before 1 July we’ve got these obligations for responsible lending and mortgage preparation seriously and will comply with these rules,R 21; the spokesman said.

HSBC did not respond in time for publication.