From today, Australians will have more freedom than ever before to walk down the road and get a better deal on their hard-earned savings, with the introduction of a new 'tick and flick' switching service.
This new 'tick and flick' service will allow depositors to move their money in deposit accounts with the stroke of a pen, putting more pressure on financial institutions to offer better value and service.
The Gillard Government is also bringing in tough new laws starting today to protect consumers by cracking down on the unfair treatment of Australians with credit cards.
Treasury estimates that Australians will save around $225 million annually from just one of these credit card reforms alone – preventing lenders charging fees to customers who go over their credit limit, unless they've expressly asked for this service.
An Australian family could save something like $360 a year or more from the Government's new reform to force lenders to allocate repayments to higher interest debts first.
These important new reforms are all about sticking up for hardworking Australians, because every dollar counts when it comes to minimising the amount of interest you pay on your credit card bill and maximising interest on your deposit account.
Taking the headache out of switching deposits
The new 'tick and flick' service will take the headache out of switching deposits by removing the burden of having to change the details of automatic debit and credit transactions.
Customers will now only need to sign a single form to authorise their new financial institution to do all the heavy lifting for them.
The new institution will then arrange the transfer of all automatic transactions linked to the customer's account and inform associated creditors and debtors about the new account details.
Deposit institutions will also offer additional services such as obtaining a list of customers' automated transactions from their old financial institution if the customer can't remember them, or the ability to cancel any direct debits or credits if the customer doesn't need them anymore.
This initiative will give consumers the power to easily switch to another bank, building society or credit union if their existing institution isn't providing good value and service.
New protections for Australians with credit cards
The Gillard Government is also proud to deliver new laws giving Australian consumers a fairer go with their credit cards from today.
There are some 15 million credit-card accounts in Australia - many families have 2 or 3 different cards - and these reforms will crack down on 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.
These measures are part of the Government's wide-ranging reforms to promote a competitive and sustainable banking system to give every Australian a fairer go.