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Changes to credit card laws in Australia

As ipa accountants we recieve industry information on a regular basis. Importnat information we have just found out is from the 1st July 2012 some very important changes to credit card laws in Australia came into effect and it is vital that every Australian with a credit card, small business or individual, is made aware of them.

Credit card debt is a huge problem for many households and businesses who have fallen into the trap of this readily available source of funds, only to struggle with the repayments down the track.

Taking up the option of easily accessed limit increases without the thought of being able to repay the debt has also seen our nations credit card debt skyrocket.

The important changes can be summarised as follows:

1. Repayments on credit card debt will now be automatically applied to the debt that attracts the highest interest rate. Previously, the opposite was the case.

2. Your monthly statements must now show just how long it will take to repay the entire debt if you only make the minimum repayment each month.

3. Credit card lenders can no longer offer unsolicited limit increases unless you expressly agree to receive them.

4. A number of excessive fees, such as late payment fees have also been banned.

It is critical to note that many of these changes will only apply to new credit card accounts issued after 1 July 2012.

So if you are being weighed down by credit card debt, now is the time to review these debts and look at ways and means of reducing the interest charges on your debt, even if that means refinancing to another credit card lender, or even a personal loan. By doing so, you'll save years off the time it takes to clear yourself of these debts.

For any questions on this matter contact nearest small business accountant or financier.

 
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