New Credit cards will be placed under a new regime from 1 January to help slim down Australia’s debt addiction, but the new rules may come as a shock for Australians banking on a balance transfer to get out of Christmas debt.

From 1 January 2019, credit card providers will have to:

  • assess whether a new customer can afford to repay the credit limit within three years;
  • stop applying interest charges retrospectively; and –
  • provide online options to cancel cards or to reduce credit limits. research director Sally Tindall joins Dave in Morning lifesatyle to explain the new federal government reforms will curtail the credit card limits for many Australians and prevent some people on low incomes from getting a credit card altogether.

“This will be difficult medicine for some people to swallow, but it’s a positive step towards getting Australians off the credit card debt treadmill.

“While the new rules provide better protection for consumers, it could come as a shock to anyone wanting to transfer existing debt on to a new balance transfer card.

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Monthly repayments new credit card applicants will need to prove they can pay:


Credit cart limit Mthly repayments required
$5,000 $178
$10,000 $357
$15,000 $535
$20,000 $713


Notes: the above calculations are based on a person clearing the entire credit limit within three years, including interest charges at an average interest rate of 17.04 per cent.


“One of the big traps for people taking out zero percent balance transfer deals is that they fail to cancel the old card and end up with two cards.


“The new legislation will help people re-think the merits of having multiple credit cards and make it easier to cancel ones they don’t need.


“It will also see some people opt for personal loans, which in some cases can be a better long-term solution because they force people to pay off their debt in full,” she said.


Ms Tindall said while the reforms would prevent many Australians from biting off more than they could chew, more work was needed to help Australians get out of existing debt.


“A government-mandated minimum repayment of at least five per cent would put a proper dent into the $31.8 billion of credit card debt Australians are currently paying interest on,” she said. data shows that the majority of cards ask customers to pay just two per cent of their credit card debt every month, while the highest minimum repayment is just five per cent, offered by three providers.




Credit card debt: $51.6 billion

Credit card debt accruing interest: $31.8 billion

Total credit limits: $152.1 billion

Average interest rate: 17.04 per cent


Sources:; RBA credit card statistics