Labor have announced proposed banking policy changes to ban pre-approved increases to credit card limits by mid 2012.
The new National Credit Legislation which was introduced in July 2010 already covers both pre-approved credit card limits and uninvited credit card offers received in the mail.
With the current proposal made by Labor, banks would struggle with promotion of pre-approved increases in credit without the prior agreement of customers.
ALP would also like to introduce other rules to prevent banks from allowing customers to borrow in excess of their credit limit which automatically charges them penalty fees.
Banks will be required to develop a common method for calculating interest due on credit cards and to apply repayments in a consistent manner. Rules will require that credit card companies apply monies paid to the credit card by the card holder to the most expensive debt first.
While the ALP have developed a website promoting their proposed “Fairer Simpler Banking” policy, the policy does not address any issues other than aspects of credit card product design and practice.