Will responsible lending law changes make credit card churning easier?

[TomVexille]

Wow. How nuts can it get.

The basic ordinary “family” household would at a minimum spend no more than $40,000 a year..... renters v home-owners would have some lifetime differences as mortgages do get paid off but rent is never ending.

Abolished in 2015, yea, but it hasn’t stopped unsolicited offers asking you to opt in, multiple times or to dress up the offer as “roast pork”....
Numerous emails to that effect...still when it comes to paying for J or F fares, I suppose you need a card to shovel on the cost...

It would very easily spiral out of control ....

I think we're relatively frugal but we'd easily spend $40k before mortgage payments

 

[greennick]

You did not read the last line of what you quoted of my post - right up-to-date...

All financial institutition sent out emails about whether you wished to receive automatic credit limit increase offers in the future. The elections made then still apply today.

No, I read it, and I stand by it. This is not up to date information. You may be across the earlier reforms, but not the reforms that became effective in 2018 and 2019.

Ban on credit card limit increase invitations

Card card issuers can not contact customers to offer credit limit increase invitations. This includes all forms of communication (including email, phone and in-branch). This applies even if customers have previously provided consent to receive these invitations.

1 July 2018

 

[greennick]

Wow. How nuts can it get.

The basic ordinary “family” household would at a minimum spend no more than $40,000 a year..... renters v home-owners would have some lifetime differences as mortgages do get paid off but rent is never ending.

Abolished in 2015, yea, but it hasn’t stopped unsolicited offers asking you to opt in, multiple times or to dress up the offer as “roast pork”....
Numerous emails to that effect...still when it comes to paying for J or F fares, I suppose you need a card to shovel on the cost...

It would very easily spiral out of control ....

Banks are required to obtain all that information though and can't give you credit without making an assessment which requires it. That includes:
- what your expenses are (which are then compared to HEM at most banks)
- what debt repayments you have
- what rent you have
- what HECS, child support, super, salary sacrifice and other deductions you have

This is why now it is so damn difficult to get a credit card, even though a cursory look at your accounts may identify you can clearly afford it, they still will go through the full process built for the lowest common denominator. There is scope in the current regulations for these processes to be scalable (ie, them to do less if you can clearly afford it and more if you are at the margins), but almost every bank doesn't, most only do the do more part.

 

[ramboflyer]

I think it will make churning cards easier but I don't agree it should. There are many poor sods out there caught in the cycle of ever increasing debt and I don't think smart to make it too easy to get another card.

I don't disagree about the "poor sods caught in the cycle of ever increasing debt" bit but because of those people not being more responsible others get punished because they cant get cards when they are able to handle the extra credit in their financial life. Lots of discussion on another thread about credit card approvals after retirement.

 

[albyd]

It’s become even more difficult now. I requested a balance transfer for my long established Westpac Altitude card. I’ve had quite a number over the years. They said they can now only do BTs for new applications for ‘compliance’ reasons - assuming it’s got to do with responsible lending though not exactly sure how of a customer who is already approved for a limit can get themselves in more trouble by making purchases at the purchase rate than the usual concessional rate applying to BTs. My 2 cents worth anyway.

 

[greennick]

It’s become even more difficult now. I requested a balance transfer for my long established Westpac Altitude card. I’ve had quite a number over the years. They said they can now only do BTs for new applications for ‘compliance’ reasons - assuming it’s got to do with responsible lending though not exactly sure how of a customer who is already approved for a limit can get themselves in more trouble by making purchases at the purchase rate than the usual concessional rate applying to BTs. My 2 cents worth anyway.

The new rules aren't out yet, let alone implemented by banks, most have just gone through a cycle of tightening processes. I doubt there is a compliance reason for them not being able to do BTs. Likely just they don't want to give you a good rate on debt you racked up elsewhere, giving revenue to another bank. If it was from another Westpac account, they never would have allowed that and I'm not sure any bank allows internal BTs.

 

[CaptJCool]

Aussies wipe away credit debt

Credit card debt has hit its lowest level in more than 15 years, with Australians switching to cheaper lending services such as buy now, pay later.

www.news.com.au

Looks like a lot of voting with feet, the govt following the popular trend towards ‘Afterpay’

With 21-24% interest charges, the jig is probably up so I expect to capture churn customers or bring back lost people some need for attractive sign-up bonuses...

Thoughts?

 

[ramboflyer]

Aussies wipe away credit debt

Credit card debt has hit its lowest level in more than 15 years, with Australians switching to cheaper lending services such as buy now, pay later.

www.news.com.au

Looks like a lot of voting with feet, the govt following the popular trend towards ‘Afterpay’

With 21-24% interest charges, the jig is probably up so I expect to capture churn customers or bring back lost people some need for attractive sign-up bonuses...

Thoughts?

Lets get back to big sign on bonuses I say. Covid is a just a cane toad hump in the road to point accumulating heaven. Surely 2022 will be some sort of normal. The world cant lock down forever.

 

[exceladdict]

Lets get back to big sign on bonuses I say. Covid is a just a cane toad hump in the road to point accumulating heaven. Surely 2022 will be some sort of normal. The world cant lock down forever.

Time to reset the exclusion periods by closing any open cards