Credit cards Updated:
The UK's 30 million credit card holders are set to benefit from a number of new rules that will give them greater control over their finances.
Perhaps the most eye-catching change will be that repayments will be used to pay off the most expensive debt first, meaning debt can be paid down quicker.
In the past, providers have used repayments to pay down the cheapest debt – a 0% balance for instance – first, meaning balances charged at a higher rate of interest continue to grow.
This has long been a point of contention amongst card holders and consumer groups.
It is thought that the change will directly benefit around a quarter of credit card accounts.
Card companies will also send an annual statement to customers clearly outlining how much they have paid back and how much they have used their credit card, while they will be excepted to give people advice on how to pay their debt off more quickly.
Other changes include:
"These are important changes, and we are pleased they are being made as planned. At times like this it is vital that we do what we can to help consumers struggling with debt problems," said Joanna Elson OBE, chief executive of the Money Advice Trust.
"We believe these changes will not only help people repay their debts, but that they will also help prevent future debts."
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