Lenders must ensure credit cards are suitable for consumers
People looking for low interest home loans may be keen to learn about a new piece of legislation.
The Australian Securities & Investments Commission (ASIC) has announced banks will have to ensure that products are suitable for potential borrowers.
In this way, lenders will have to make reasonable assessments of customers before offering items such as loans and credit cards.
This forms part of the new National Consumer Credit Protection regulations which were, in part, designed to ensure people do not borrow above their means.
According to ASIC, the obligation on the part of lenders is "scalable", which means people will be assessed on an individual basis considering their personal situation.
"The obligation varies depending on the circumstances, including the potential impact on the consumer of entering into an unsuitable credit contract, the complexity of the credit contract and the objectives and financial literacy of the client," a statement from the authority said.
Meanwhile, the Reserve Bank of Australia recently stated it would continue to monitor credit card fees.
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