Credit card reforms good for consumers, says NAB

NAB has cancelled over-limit fees on credit cards. Photo / Getty Images

National Australia Bank has sought to distance itself from the banking oligopoly again over exception fees, saying credit card law reforms would benefit consumers.

NAB's personal banking boss Lisa Gray said on Sunday the lender had already made changes to its credit card portfolio and the Government's proposed changes to credit card laws were consistent with these.

Gray was responding to Prime Minister Julia Gillard's announcement that a re-elected Labor Government would ban banks from charging fees if their consumers exceed their credit card limit.

Under existing laws, customers can be slugged up to A$25 ($35) if their bill goes over a spending threshold.

But Labor wants to change that so lenders would be prevented from drawing a credit card account over the maximum limit without the consent of the consumer. The Government also proposes to ban unsolicited offers to extend credit limits.

NAB had already abolished its over-limit fee on credit cards and cut its late payment fee, Gray said.

But she was silent over whether NAB would abolish unsolicited credit limit extension offers.

"While further consultation would be needed, some sensible credit card law reforms would benefit consumers and banks offering the fairest and best value," NAB said.

NAB's position stands in contrast to its big four rivals, with the bankers' peak lobby group saying the Government's policy was not needed since the "vast majority" of Australians used their credit cards responsibly.

The association's chief executive, Steven Munchenberg, also said banks already consulted consumers if they wanted to raise credit card limits.

Last year NAB sought to differentiate itself by cutting exception fees and undercutting mortgage rates.

The big four banks, with six other domestic lenders and two global banks are facing a A$5 billion class action over honour, dishonour, over-limit and late payment fees on transaction and credit card accounts from 2004.

Law firm Maurice Blackburn and litigation funder IMF Australia are claiming the fees were excessive, punitive charges as they were much higher than the actual cost to the bank for a breach of contract on the accounts.

Recent research from financial comparison website RateCity found the credit card fees charged by Bank of Queensland, Bankwest, Suncorp and HSBC were at least 26 per cent higher in May 2010 than in May 2004.

Commonwealth Bank and Bendigo and Adelaide Bank held their average fees steady over the six years.

ANZ, Westpac, NAB, Bank of South Australia, St George Bank and Citi cut their average fee.

- AAP