Government announces plans to scrap credit card fees

Australians with credit cards will see some fees relating to the products scrapped as part of a clampdown on banks by the government.

Under the proposals, credit card holders will not be forced to pay charges if they go over their credit limits, while financial institutions will also be banned from offering to raise restrictions for their customers.

Those with credit cards will not be able to exceed their limit by more than ten per cent and chief executive of the Australian Bankers Association Steven Munchenburg was quoted by the Australian Financial Review as saying: "Everyone now knows they can go over their credit limit by ten per cent and the bank can't do anything about it."

According to the news source, customers will save hundreds of millions of dollars per year as a result of the change, which will come into force in July.

Transactions made overseas that take the customer over the ten per cent limit will also be rejected.

Recent research by watchdog Choice revealed ATM users have to pay as much as $4 to withdraw cash while in a foreign country.

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