Banks will stop using daylighter-shaped credit cards to fund holidays for the first time next year.
The change comes as the global financial crisis deepened and the global economy took a downturn hit.
The Reserve Bank of Australia said this week it would reduce the value of the credit card that Australians could use to fund holiday spending from $1,500 to $300.
“The RBA’s review into credit card spending and holiday spending is expected to recommend a range of options to increase the value in the future,” the bank said in a statement on Tuesday.
“We will continue to look at how to help our customers and ensure our customers can spend their money on the things they really want and need to do.”
The RBO said it was introducing a new payment option called the Daylite card to “promote the value” of credit cards and the holiday experience for Australians.
The daylender said it had seen “significant” growth in use of credit card payment for holiday spending and was now providing the cards with the right customer service and guidance to ensure the cardholders’ accounts were secure.
“Daylenders are happy to help customers and are committed to working with them to make the process a more pleasant and enjoyable one,” the Daylender Australia spokeswoman said.
“There are now no more credit card charges for Daylenders and we encourage customers to use them when and where they are comfortable.”
It’s been a challenging time for Australian Dayleners, as holiday spending has suffered during the global economic crisis.
“For most Australians, they feel like the cost of travel is rising and they are increasingly unable to afford holidays.”
The credit card charge was the first major policy change in Australia since the global credit crisis began in 2008.
In March this year, the Bank of England lifted its lending guidelines for credit cards.
The Rbo said the Bank’s review of credit-card spending had identified “significant challenges” for credit cardholders, particularly those with low income levels, people with limited education and those with limited savings.
“This review also highlighted the need for credit-cards to be more flexible and responsive to consumers’ financial needs,” the Rbo’s chief economist, James Bledsoe, said.
In a report in March this, the RBA warned the holiday-related spending of Australians would have to be “more flexible and sensitive to the cost and availability of travel and accommodation” as part of the global recovery.
“At the same time, we recognise that Australians need to take responsibility for their own spending, and it is important to ensure that they do not lose out to other people who are able to take advantage of their credit card, particularly as the economic recovery continues,” the report said.