Credit card fairness reforms long overdue
The Government’s credit card reforms bring welcome but long overdue responsible lending practices to the financial sector that will help consumers be better informed and less likely to find themselves paying unnecessary interest payments on credit card debt.
According to bankmecu General Manager Development Rowan Dowland, consumers deserve to be provided with more information about how credit cards work and not to be encouraged to increase their limits.
“Since 2004 bankmecu has had a no-marketing guarantee on our credit cards because we don’t believe it is a responsible practice to prompt our customers to access more and more credit.
“We’re pleased to see that these reforms will make this an industry-wide practice,” Mr Dowland said.
Under the Government reforms, all financial institutions will only be able to promote increases to credit card limits if the customer has expressly asked them to do so.
“Credit cards are useful and necessary banking products but it is vitally important they are used responsibly - people need to understand how interest free periods work and how interest is calculated so they can make informed decisions about using them.
Mr Dowland also welcomed the new account switching changes that will make it easier for Australians to switch their transaction accounts.
“We’re hoping it will encourage consumers to look around, compare products and consider the alternatives, like customer owned banks.
“Because each individual customer is our largest shareholder this translates into a very different approach to running our business, and a much more satisfying banking experience for customers.
In fact, in June bankmecu achieved a 94% customer satisfaction rating, outstripping the best of the big 4, NAB, which announced a 80.1% satisfaction rating in May.
“Unlike other banks, bankmecu’s profit is owned by customers and used to strengthen the bank and give them a better deal – in fact in 2011 our customers were collectively $31 million# better off than they would have been banking with the big four banks,” Mr Dowland said.
bankmecu is Australia’s first customer owned bank with assets exceeding $2.8 billion and over $300 million in capital. bankmecu has 26 Service Centres across the country, some 128,000 customers and around 348 staff.
To find out more about the credit card reforms visit www.bankingreforms.gov.au
# Source: bankmecu’s Cannex Valuation report June 2011. Canstar Cannex provides fact-based data and ratings to Australian consumers and financial institutions.
bankmecu General Manager Development, Rowan Dowland is available for comment.
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