Australia's love affair with plastic has blown out credit card debt to $49 billion and borrowers will be slugged with a record $1.31 billion in fees, according to last week's Reserve Bank bank survey.

But new laws, which come into effect on Sunday, aim to improve transparency and help customers understand the fine print and fees charged on credit cards.

Salvation Army's Moneycare manager Joi Picker said the changes were long overdue. Her service gives free and confidential advice to Canberra families experiencing financial stress and Ms Picker said her staff see about 40 clients each week.

The demand for the financial advice service had increased 25 per cent in the past year.

''It's usually about credit card debt although electricity bill problems have been increasing,'' Ms Picker said.

''Almost every person who comes to us has a credit card.''

Matthew Levey from consumer advocate group Choice said credit card contracts were hard to understand.

''Most people don't know that in the past, any payment made on a credit card paid off the lowest interest purchases first,'' Mr Levey said.

But from next month repayments will first be applied to the most costly aspect of credit card debt (such as cash advances) to reduce debt faster.

Bills sent out after Sunday will also show how long it would take to repay the entire balance if only minimum repayments are made.

Mr Levey said it would make it easier for people to understand the consequences of repaying the minimum.

''If you only pay off that minimum balance requirement, which often people think is all they need to pay, you might be paying off that balance for decades,'' he said.

He urged Canberrans to change credit cards as some of the new laws did not apply to existing debt.

''The big problem with a credit card is that people use it for a convenience but then what should be a short-term debt actually becomes a medium- or long-term debt.''

From next week credit card companies cannot offer limit increases unless the customer has agreed and must provide clearer details on interest-free periods.

On new accounts, standard fact sheets will make it easier to compare lenders and the customer can set their own borrowing limit.

Mr Levey said households paid $470 million in credit card fees in 2009, a 10 per cent increase on the previous year.

''That's why the July 1 credit card reforms are so important, because they will abolish over-limit fees for new cards unless the customer has specifically agreed to this. That's why we are encouraging people to switch to new cards from July 1.''