Credit card health warning

Credit card statements would come with health warnings under a radical plan to save consumers from Australia's $34 billion debt trap.

The warnings would detail the ultimate cost and time of paying off the credit card debt in minimum monthly repayments.

Banks and other lenders would be forced to print the warnings on the bottom of monthly statements as part of an overhaul of the state's credit laws.

The Consumer Credit Review also recommended reining in the predatory tactics of lenders by banning unsolicited credit card limit increases.

The State Government review put the credit industry under the microscope amid fears many Victorians were drowning in debt.

The review also called for:

A BAN on lenders taking a borrower's household goods as security for a loan.

A SYSTEM for consumers to dispute unreasonable fees.

STRICTER guidelines for the registration of credit card providers.

THE introduction of approved alternative dispute resolution services by all lenders.

STRONGER government power to prosecute dodgy credit providers.

MORE protection for reverse mortgage customers.

Consumer Affairs Minister Marsha Thomson said it was vital the state had effective controls, with national debt hitting $34.2 billion last year.

It also called for thorough assessments by lenders of their customers' abilities to pay credit card bills.

Consumer law groups yesterday welcomed the report.

But Australian Bankers Association director Ian Gilbert said Australians were managing credit card debts well and he feared the health warning and credit limit ban would add another layer of regulation.