Can my credit card be considered reckless lending?

The quick and easy answer? Yes, it can. Although while a credit facility like a credit card account can be seen as reckless lending under the right circumstances, a temporary increase in the credit limit under a credit facility is exempt from reckless lending.

What this means is that a credit card granted without the proper assessment from the credit providers, if the debtor does not understand the terms or cannot afford the repayment, can be seen as reckless lending as credit has been granted where the debtor cannot afford it without becoming over-indebted.

However, if you have a credit card and can afford it, but the increase to the credit facility occurs and causes you to be over-indebted, this does not fall under reckless lending and cannot be pursued as such.
Reckless credit, however, is not applicable to agreements that were undertaken before the June 2007 changes to the National Credit Act.
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