NAB throws down the gauntlet on credit card fees
04 July 2011
NATIONAL Australia Bank is stoking the competition war by challenging rivals to match it by applying credit card changes to both new and existing accounts, a move that could collectively save those banks' customers up to $225 million.
Credit card reforms proposed by the Federal Government were passed by the lower house yesterday after receiving opposition support, The Australian reports. Under the changes, unsolicited credit limit upgrades will be banned, while over-the-limit fees will be scaled back.
Banks will also have to alter "payment hierarchies", which effectively direct customer repayments to the credit card debt with the highest interest rates. The moves are part of the government's attempts to increase competition in the domestic retail banking market, which is dominated by the top four.
