Credit card contracts to be made "user friendly"

Credit card contracts to be made "user friendly"

3 August 2009

The latest Mutual Banking Code of Practice report may soon change the entire credit cards market with its introduction of new consumer-friendly regulations for all Australian building societies and credit unions.

The Code of Practice outlined that its regulations says that all credit cards product information will be supplied to consumers in clear, straightforward English. These new regulations were especially clear regarding credit cards contracts, in particular interest rates, fees and any charges that apply to the credit cards.

The Mutual Banking Code of Practice stated that Australian credit unions and building societies are bound in their duty for the rights of members and lenders. This new regulation should affect almost 4.6 million credit union and building society customers nationwide.

The Code further dictated that not only should financial institutions should present their credit cards contracts in simple language, but they now should play a more active role in peoples banking and accounts. This includes checking to ensure that customers are aware of all fair terms on all products, do not borrow beyond their means and can't make their repayments, that all customers are be informed of any fees and charges applicable, any exception fees must be compared to actual costs and that advice and dispute resolution services are available for all customers.

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