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Credit and store card reforms: have your say
- Published: Tuesday, 27 October 2009
The government has made a number of proposals to make credit and store cards fairer for consumers. The proposals include changing the rules that make customers pay the cheapest debt off first. Have your say on the new proposals.
Credit card consultation
Have your say on the new proposals
The government's proposals to make credit and store cards fairer for consumers include:
Changing the rules that set the order in which debts are paid off
Most credit card companies make customers pay the cheapest debt off first.
This is a particular problem for people who withdraw cash on their card, typically charged at 25 per cent annual percentage rate (APR) or more. They are often the most likely to face financial difficulties. The government is considering rules that would mean the most expensive debt is paid off first.
Raising minimum monthly repayments to encourage people to pay debts faster
Around one third of people who don’t pay off their credit card bill in full each month make only the minimum repayment. This can mean consumers take decades to pay off the debt. The government is considering introducing a compulsory higher minimum payment each month.
Banning increases in credit limits without prior consent
Credit and store card lenders often increase credit limits without consent. According to recent research by Uswitch, 5.7 million consumers saw their credit limits changed in this way in the last year. The government is considering banning this practice or requiring consumers to opt in to credit limit increases.
Restricting increases in interest rates on existing debt
The government is concerned about interest rates being increased without being properly explained. People using their cards responsibly and making payments on time should not pay the price for excessive risk-taking by financial institutions. The government is considering banning or restricting the repricing of existing debt.
Have your say
Read the full consultation document and have your say on the new proposals by following the link below.
Alternatively, call 020 7215 1923, or write or email your views to the addresses below.
Christina Anderson
Bay 436
BIS
1 Victoria Street
London
SW1H 0ET
