Credit Card Churning May Get More Difficult.

[TomVexille]

Which banks are participating in this lost 1 July? The big 4 are the only ones obligated to it right? Or is my understanding wrong there.

If I understood the proposal correctly, the big 4 are obligated (and have agreed to), but any other organisation who wants access to that information has to participate fully.

 

[rock86]

If I understood the proposal correctly, the big 4 are obligated (and have agreed to), but any other organisation who wants access to that information has to participate fully.

If you were any of the other institutions, you'd really be silly not to.

 

[TomVexille]

If you were any of the other institutions, you'd really be silly not to.

Agreed. I think the difference is that they don't have a deadline to start. But I think it'll be when not if.

 

[burmans]

If I understood the proposal correctly, the big 4 are obligated (and have agreed to), but any other organisation who wants access to that information has to participate fully.

The definition of who must contribute is large ADI where "Broadly, an ADI meets the definition of large where its total resident assets exceed $100 billion.". Not 100% sure if this only the big 4 or also includes the large foreign banks.

A bit of history here as to why only these have been mandated, the industry suffers from "information asymmetry", i.e. specifically Commbank has reportedly 60% of Australians as its customers, hence it knows a lot more about the populations credit repayment history than a small player - which doesn't really lead to a healthy market for lending. The principle of reciprocity under which this all operates does mean you have to give (CCR data) to get (CCR data) but the small players have more to gain whereas CommBank in particular has been dragging the chain as they felt their current position put them in a relatively advantaged position. So they were quite happy to do nothing and hence have now been forced into participating. Even being forced I wouldn't mind betting they will only contribute just over 50% for this first tranche if that's all they are required to!

 

[Barnaby1]

I have noticed lately that a lot of bank credit cards have less strict requirements than previously, for the "Minimum Income" (N/A) and "Credit Rating" (Any). Does this mean they are getting 'softer' in their quest for customers?

 

[Dr Ralph]

I have noticed lately that a lot of bank credit cards have less strict requirements than previously, for the "Minimum Income" (N/A) and "Credit Rating" (Any). Does this mean they are getting 'softer' in their quest for customers?

May be. But more and more now have exclusion periods.

 

[Barnaby1]

May be. But more and more now have exclusion periods.

Exclusion periods ?

 

[Dr Ralph]

Exclusion periods ?

Literally what I said.

 

[mviy]

Exclusion periods ?

i.e. you can't cancel the card and apply soon afterwards again & qualify for new customer benefits (sign up bonus & discounted annual fee for the first year). You have to wait e.g. 12 months, 18 months etc. depending on the T&Cs the bank has for their cards. Furthermore banks can lengthen the exclusion period at any time if they wish to by amending the T&Cs of their currently available cards.

 

[Barnaby1]

i.e. you can't cancel the card and apply soon afterwards again & qualify for new customer benefits (sign up bonus & discounted annual fee for the first year). You have to wait e.g. 12 months, 18 months etc. depending on the T&Cs the bank has for their cards. Furthermore banks can lengthen the exclusion period at any time if they wish to by amending the T&Cs of their currently available cards.

Many thanks MV, Cheers...

 

[burmans]

I have noticed lately that a lot of bank credit cards have less strict requirements than previously, for the "Minimum Income" (N/A) and "Credit Rating" (Any). Does this mean they are getting 'softer' in their quest for customers?

There is plenty of narrative about the Banks royal commission that this is going to be legislated to make this criteria stricter so perhaps they are taking advantage of loose regulation while they can!

 

[Renato1]

Now that we are into July, it will be interesting to see what happens and what experiences are reported here..
However, I have resigned myself to the high likelihood that my churning days are over, and comfort myself in knowing that of the approximately $50 billion of credit card debt in Australia, only $17.58 of it is mine (since I just bought a book on-line)
Regards,
Renato

 

[rock86]

Now that we are into July, it will be interesting to see what happens and what experiences are reported here..
However, I have resigned myself to the high likelihood that my churning days are over, and comfort myself in knowing that of the approximately $50 billion of credit card debt in Australia, only $17.58 of it is mine (since I just bought a book on-line)
Regards,
Renato

Why would they be?

CCR reporting hasn't seemed to stop the Americans being able to churn their credit card - can't see why Australia would be any different.

 

[Dr Ralph]

However, I have resigned myself to the high likelihood that my churning days are over, and comfort myself in knowing that of the approximately

Really? Apart from reduced earn rates on many cards, there's been little change to my churning activities. Nor do I anticipate any significant change.

 

[Renato1]

Really? Apart from reduced earn rates on many cards, there's been little change to my churning activities. Nor do I anticipate any significant change.

Why would they be?

CCR reporting hasn't seemed to stop the Americans being able to churn their credit card - can't see why Australia would be any different.

Thanks Guys,
We'll see what happens but as I see it I'd have to take my credit card limits on the four cards I want to keep down to about $4000 a card.
With my 28 Degree card I need a bigger limit than that for when travelling and paying for hotels and hire car overseas, which means I'd have to reduce the limits further on my other cards. I haven't had such micro credit limits on everyday cards since I was a University student.

Once those big limits are gone, they'll be gone forever with the new rules. Do I really want to lose the security the current limits provide? The ability to buy something really big if I wanted to?
Regards,
Renato

 

[Dr Ralph]

Once those big limits are gone, they'll be gone forever with the new rules.

Unlikely.

 

[rock86]

Thanks Guys,
We'll see what happens but as I see it I'd have to take my credit card limits on the four cards I want to keep down to about $4000 a card.
With my 28 Degree card I need a bigger limit than that for when travelling and paying for hotels and hire car overseas, which means I'd have to reduce the limits further on my other cards. I haven't had such micro credit limits on everyday cards since I was a University student.

Once those big limits are gone, they'll be gone forever with the new rules. Do I really want to lose the security the current limits provide? The ability to buy something really big if I wanted to?
Regards,
Renato

If you've got 4 open cards, and churning others, then you probably will have some issues. I may be in the minority, but if you're main strategy is to churn for bonus points (and not through high value spending), isn't having 4 cards open at a time a little excessive?

 

[get me outta here]

If and when you apply for any cc, always take screen shots of the cc offer and your application as you go. Saves any 'confusion' on the bank's and yr part later when Qs arise. You'd be amazed how many people ask if anyone has a copy of the T&Cs - how do we know what that offer was, the offers change all the time.

Many thanks MV, Cheers...

 

[get me outta here]

That's not a bad number in my experience whilst I'm waiting for points to credit, or just about to cancel plus at least 2 base cards that are held onto. I wonder what others think, it's an interesting q.

If you've got 4 open cards, and churning others, then you probably will have some issues. I may be in the minority, but if you're main strategy is to churn for bonus points (and not through high value spending), isn't having 4 cards open at a time a little excessive?

 

[I love to travel]

1 base card plus 3 others churning presently but this will drop shortly to 1+1