Credit Card Reforms

The eligibility of a user for a credit card agreement or credit enhancement shall be judged on his capacity to fully repay the credit line within a timeframe set by the ASIC. The ASIC intends to establish this deadline by legal act before 1 January 2019. These requirements shall be applicable to both new and legacy credit card agreements as from 1 January 2019.

Transposed by changes to the National Consumer Credit Protection Act 2009 (Cth). The credit card agreements concluded on or after 1 January 2019 must give clients the right to lower their credit limits (a "credit line entitlement"). A credit card agreement concluded before 1 January 2019 may also include a claim to a credit line extension.

In this case, the credit card issuer must also meet the incremental requirement as of January 1, 2019. Credit card provider's website must provide information to clients on how to lower their credit limits and how to do so. The credit card issuer may not suggest that clients request an increased credit line or that the client cannot decrease the credit line.

The credit card provider must take appropriate measures to make sure that applications for credit line reductions are processed promptly. Credit card issuers, however, are not required to lower the credit line below a specified credit line threshold. Transposed by changes to the National Consumer Credit Protection Act 2009 (Cth). It is forbidden for credit card companies to charge interest retroactively on a credit card account that had the advantage of an interest-free payment cycle.

That means that if a credit card credit is not fully disbursed by the end of an interest-free term, the lender is not entitled to retroactively calculate interest for that interest-free term. However, this does not preclude the creditor from invoicing the client interest on an outstanding amount after the due date of theayment.

Both new and legacy credit card agreements will be covered from 1 January 2019. The ban shall, however, be limited to operations carried out on or after 1 January 2019. Transposed by changes to the National Consumer Credit Protection Act 2009 (Cth). The credit card agreements concluded on or after 1 January 2019 must grant the customer a right of cancellation (a "right of cancellation").

These authorizations place further demands on credit card issuers. The credit card agreements concluded before 1 January 2019 may also include this right to cancellation. In this case, the credit card issuer must also meet the incremental requirement as of January 1, 2019. On the credit card provider's website it must be stated that the customer has the right to cancel and how to do so.

Card issuers may not suggest that clients stay in a credit card agreement. The credit card provider must take appropriate measures to make sure that cancellation applications are processed promptly. Transposed by changes to the National Consumer Credit Protection Act 2009 (Cth). Card issuers may not issue limit-enhancing invitation cards to clients with respect to their credit card.

The ban applies to credit card agreements concluded before, on or after 1 July 2018. Transposed by changes to the National Consumer Credit Protection Act 2009 (Cth).