The Gillard Government is proud to deliver important new laws giving Australian consumers a fairer go with their credit cards and helping them easily compare home-loan offers side by side so they can get the best deal for their families.
The Parliament late yesterday passed the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill (the Bill), which will give Australians more control over how they use their credit cards in managing their monthly budgets.
There are some 15 million credit-card accounts in Australia - many families have 2 or 3 different cards - and these reforms will stamp out lender practices that see consumers pay more interest than they should. The changes will:
- Force credit card lenders to allocate repayments to clear higher interest debts first;
- Stop lenders from bombarding consumers with pre-approved, tick'n'flick offers to increase their credit limits;
- Prevent lenders charging fees to customers who go over their credit limit unless they've expressly asked for this service;
- Make it mandatory for credit-card application forms to include a clear summary of key account features;
- Require all lenders to clearly warn consumers on their monthly credit statement of the consequences of only making minimum repayments.
The Bill also delivers on the Government's commitment to introduce compulsory, one-page key fact sheets for new home loan customers from January 1 next year.
This will allow consumers to easily compare loans offered by the big banks, regional lenders, credit unions and building societies, helping them get the home loan deal that's right from them.
This is all about giving Australian families the ability to really compare apples with apples when they're shopping around for a mortgage so they can more easily find the best value.
The Government will keep working hard to give all Australians a fairer go in the banking system.