Credit card changes coming your way in 2019

Credit card providers have been forced to clean up the way they treat customers who are laden with plastic debt. This is how it will affect you.

Credit card providers have been forced to clean up the way they treat customers who are laden with plastic debt.

Many Australians are struggling with card debts — latest Reserve Bank of Australia statistics show the nation owes a massive $51.6 billion and $31.7 billion is accruing interest.

The corporate regulator, the Australian Securities and Investments Commission, has today released a report, Credit card lending in Australia — an update, and found among the 10 lenders who are part of the review many have begun to improve the way they handle card debts.

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Australians owe more than $51.6 billion on credit cards. Picture: iStock

It found many credit providers are taking the following steps:

- Trialling measures including structured payment arrangements to help customers with problematic card debt;

- Restricting the amount customers can exceed their card limit to 10 per cent;

- Adopting a fairer approach to balance transfers such as allowing interest-free periods on new purchases;

- Improving disclosure about how to cancel old credit cards.

Visa and MasterCard credit cards generic

ASIC engaged 10 of the largest credit card providers in the review including American Express, ANZ, Bendigo and Adelaide Bank, Citigroup, CBA, HSBC, Latitude, Macquarie, NAB and Westpac.

The report found Macquarie, CBA and HSBC have been the most progressive in adopting the credit card changes.

ASIC’s commissioner Sean Hughes said he expected all lenders to address issues raised in their review.

“We will be monitoring lenders to make sure they have taken action to address our concerns and to ensure that consumer outcomes are improving in the credit card market,” he said.

A raft of new credit card changes are being rolled out from January 1 in the bid to also help prevent cardholders from running up more debts.

This includes:

- Customers must show they can repay their entire card limit within a three-year period;

- Credit providers must give customers the ability to cancel or reduce their credit limits online;

- Banks cannot back date interest charges on credit card balances. Previously, if you failed to pay back the full amount listed by the due date on your statement, interest would be backdated based on when purchases were made.

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@sophieelsworth