Broker clients still rocked by credit card debt, despite signs of national improvement

by AB28 Mar 2013

Broker clients continue to be haunted by poor credit card decisions, despite evidence that credit debt is slowing down nationally, according to Melbourne-based broker, Marios Rokka.

Rokka says he’s seen ‘many’ home loan applications adversely affected by clients who have accepted a seemingly innocent credit card limit increase.

“Automatic credit card increases are common these days, but these increases can have a big impact on your borrowing power, especially when you don’t use the limit you have been granted,” he says.

Interestingly, Rokka’s observations follow reports that the value of national credit card debt has fallen from more than $50 billion last year to $48.7 billion, while the average balance is shrinking.

The availability of debit cards, which allow users to spend their own savings rather than rely on credit and rapid technology changes have been lauded as reasons behind the shrinking national credit debt figure.

However, as Rokkas points out, the issue is far from over, with many broker clients surprised to find that a limit of $10,000 on a credit card, for instance, can reduce their borrowing limit by up to $30,000.

“When you’re going through a home loan application, lenders are going to look closely at your savings and income, but they also place a huge emphasis on the amount of credit you have available, which could potentially affect your ability to make future repayments.”


  • by ANF 28/03/2013 11:36:50 AM

    Marios, automatic limit increases where outlawed with the introduction of the NCCP. If you are still seeing these practises, then maybe you should report those offending.

  • by Greg 28/03/2013 3:41:54 PM

    I agree with Marios. The practise was prolific and increases offered with no other qualification than an acceptance. The problems of the past have not gone away because of the NCCP - perhaps it will protect new card holders better. I put it out there that the home loans granted do far less damage than credit card debt and POS credit terms e.g. 5000sqm television with no upfront and no repayments for 5 years - please stress the 30% rate at the other end.