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In 2017, ASIC began a review into credit card lending in Australia, looking at issues highlighted by regulatory reforms and the Senate Inquiry. The review focused on three areas:

(a) Consumer outcomes—We sought to identify the debt outcomes for consumers from their credit card products over time, with particular attention to consumers who are in arrears, carry debt at a high interest rate for a long period, or repeatedly make low repayments.

(b) Balance transfers—We looked at when and how balance transfers are used, how they are repaid and their effect on aggregate credit limit and debt levels over time.

(c) Effectiveness of key reforms—We wanted to look at the effect of the additional requirements for credit cards, especially:

(i) disclosures intended to help consumers choose credit cards and encourage them to make larger repayments; and

(ii) requirements standardising how repayments are allocated to outstanding balances.

Twelve credit providers participated in our review. These providers covered the vast majority of the credit card market and include the major banks, a mixture of mid-tier banks, foreign banks, customer-owned banking institutions and non-bank lenders.

We also consulted with other stakeholders, including domestic and international government agencies, industry associations and consumer advocacy groups.

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