Labor pledges to reform credit card limit fees

By Mozo ·

Labor has pledged to protect credit card holders from falling further into debt and incurring excessive fees.

Setting out its election policy, the federal government said card companies would have to get permission from new customers to charge fees for going over a credit limit.

In addition, banks would not be allowed to increase credit limits without agreement from customers. Such measures could have a major impact on the decisions of consumers looking to compare credit cards in search of the best providers.

Speaking to Channel Ten, treasurer Wayne Swan said: "What we want to do is empower those credit card holders to give them better information and to make sure that when they take decisions about repayments and so on, they, frankly, don't get ripped off.

"There are a couple of important measures we are going to put in place – that cardholders must agree if they are going to be charged fees for going over the limit, for example. There must be a standardisation of how interest is applied."

Among the other suggested measures was the requirement that companies would have to make sure repayments on a card go towards the debt accruing the highest interest first.

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