Credit cards Updated:
The UK credit card industry wants to water down the Government's proposals to clamp down on certain practices within the sector.
Responding to the Government's plan to ban unsolicited credit limit increases, the UK Cards Association said it only wants to apply the restriction to customers facing difficulties, with any other customer being given a 30 day notice period in which to opt out.
Meanwhile, the Government's efforts to ensure the most expensive credit card debt is paid off first also met with a lukewarm response.
In the opinion of the association, only credit card payments above the minimum payment should be allocated in this way, with lenders having the discretion to allocate the minimum payment amount as they wish.
It also believes that changes to the interest rates on existing debt should still be allowed, as in 40% of cases rates were reduced.
Amongst the association's other responses was the idea that card companies contact any customer who repeatedly only makes the minimum repayment on their card to make clear that this is the most expensive way of paying off a debt.
"The credit card industry is keen to give consumers as much control of their finances as possible," said Melanie Johnson, chair of the UK Cards Association.
"Our approach will deliver big improvements to customers without smothering competition and choice, which customers value and from which they gain significant benefit. It will also maintain features which are vital to lenders being able to lend responsibly."
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