The federal government’s next round of credit reforms are around the corner but some credit card holders have felt the angst from their providers for the past year. In fact, we think that the reforms are making some credit card providers feel on edge. Their customers have been bombarded with marketing material by post, SMS, and I have personally experienced their angst with misleading notes at the bottom of my statements!

The new banking reforms come into effect from July 1, and will essentially help limit the “pushiness” of card providers and place greater responsibility onto providers when handing out credit cards.

Some of these changes include:

- Over the limit fees (also known as exception fees) will be banned unless card holders agree to use the service

- Card holders will be given a key fact sheet about their card account

- Repayments must be directed to the debt with the most expensive interest rate first

- Offers to increase credit limits will be banned unless customers provide consent.

The banking reforms are a great initiative by the federal government. But the problem with the above list of changes is that the first three points are for new customers only. This means if you already have a credit card account:

- You won’t be given a key fact sheet,

- You will still be up for exception fees if you go over your credit limit (which averages about $30 according to RateCity’s database)

- And repayments can still be directed to your debt with the lowest rate first. So if you have a credit card for instance with a balance transfer debt of $5,000 at 1 percent interest and a $5,000 debt from purchases with a rate of 17 percent, your repayments could still go towards your balance transfer debt first.

In the lead up to these changes on July 1, some credit card providers have become more aggressive by pushing customers to increase their credit limits and offering special deals to secure new customers.

I have to give it to them: many credit card providers have been working tirelessly to avoid any loss in revenue when the banking reforms are in place next month. We’ve found nine cards that have increased their annual fees, over one-third of cards with a balance transfer deal have dropped their introductory rates promoting special deals, and some were so desperate that they have threatened their customers that they might not receive an increase to their credit limit if they don’t provide consent to receive invitations to increase before July 1.

It’s clear that some card providers are on edge about the reforms and we doubt they will give up on pushing the boundaries once the changes are in place. Card holders shouldn’t ever feel pressured or bullied by their card providers and there are options you can take if you do:

- Card holders can make a complaint to the company.

- If you are unhappy with their response you can lodge a complaint with the Financial Ombudsman or Credit Ombudsman services.

- Or compare credit cards using credible financial comparison websites like RateCity.com.au and switch to a different provider after July 1, to make sure you will benefit from more of the new credit reforms.

For more information about the credit reforms, the government has outlined details on the Australian Banking Reforms website: www.bankingreforms.gov.au.