Credit card changes mooted - Credit cards - News - Moneyfacts


Credit card changes mooted

Credit card changes mooted

Category: Credit cards

Updated: 04/02/2010
First Published: 19/01/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

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."

Compare 0% balance transfer

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

It’s looking to be a credit Christmas

We are now less than 70 days away from Christmas, and with 70% of people admitting they haven’t started saving yet, millions will be needing to play catch-up - and plenty planning to turn to credit for some Christmas spending relief.

Can no credit score be as damaging as a bad one?

Debt is becoming an increasing problem, which is why those who have no credit commitments often feel pretty smug about it. However, while not relying on credit is admirable, having no credit score can actually be just as damaging as having a bad one.

Know your credit score – key to better borrowing

We all know how important it is to be credit savvy. It’s the only way to make credit work, which is why it’s so concerning that so few people know their credit score – and some don’t even know how much they’re borrowing.