Banks have rejected five recommendations from an independent review of the industry's code of conduct, including one that lenders only raise credit card spending limits at the explicit request of customers.
Among 99 recommendations made by former ASIC executive general manager Phil Khoury in his review of the Code of Banking Practice was one that banks be prohibited from offering higher credit limits on cards unless a customer initiated the move.
But the Australian Bankers' Association said customers can already opt out of invitations to increase their credit limit and that legislation was already in place to ensure credit limits were set responsibly.
"This approach preserves the ability of customers to be made aware of their options, and allows them access to credit if their circumstances change," the ABA said in its response to the review.
"Furthermore, this approach ensures the preservation of customer choice and preference."
The ABA said it would instead improve the way it identifies customers in financial difficulty to stop their limits being increased.
But the industry accepts action is needed on credit card regulation, supporting suggestions including that higher interest debts should be paid off first and that customers should receive at least 30 days notice that any introductory offer - such as no interest on balance transfers - is set to expire.
"Through the code, banks will make it easier for customers to reduce a credit card limit or cancel a credit card," the ABA said.
"In parallel, we will be working with the government to ensure these changes are widely adopted across the credit card market."
The ABA - whose members include the big four of Commonwealth Bank, Westpac, National Australia Bank and ANZ - said the industry supported 61 of Mr Khoury's recommendations.
Another 29 were supported in part or in principle, while the ABA said its members needed more time to come to a position on the remaining four.
An independent consultant will be appointed to work with the ABA to redraft the self-regulatory code, which is expected to be published in its final form by the end of 2017.
