Most readers may not have heard of the National Credit Act, but this set of laws came into effect in 2010 and was designed to provide an update to the rules that apply to credit cards, loans and reverse mortgages.
One of the changes that many people are unaware of is the rules regarding credit card issuers offering invitations to increase your credit limit. For example, did you know that the credit card companies are NOT allowed to send you invitations to increase your credit limit without first getting your agreement? This applies to both new and existing credit cards.
Most of us have probably given the credit card suppliers permission to send these invitations without actually realising it. However, you can change your mind and opt out of receiving invitations by contacting your card issuer at any time.
It is important to remember that whether you decide to opt in or out of receiving these invitations, you can ask your card issuer for an increase to your credit limit at any time without waiting for an invitation. It is also important to bear in mind that if you do agree to receive invitations, you don’t need to accept a credit limit increase if you don’t want to or feel you can’t manage a higher amount of credit.
The other crucial factor you need to remember is that any time you accept a credit increase, whether you asked for one or not, it will appear on your credit record as a loan increase. This is particularly relevant if you plan on applying for a new home loan, or even refinancing an existing loan, as it will be taken into consideration by any lenders you are dealing with.
The last thing you want is to keep on accepting credit limit rises until you get into trouble with your credit card debt!
If you are planning on a move like this, it might be wise to have a chat with an experienced Mortgage Manager at Dreamstreet before you agree to the increase, just so you know what the ongoing consequences might be?
Remember, you can call us any time on 1300 230 240.
- 11 Feb, 2016