Credit card crackdown welcomed - Credit cards - News - Moneyfacts


Credit card crackdown welcomed

Credit card crackdown welcomed

Category: Credit cards

Updated: 27/10/2009
First Published: 27/10/2009

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 It is now over 6 months old so the content may be out of date.

New proposals to ensure that credit and store card companies give people a fairer deal have been announced by the Government.

Amongst the suggestions put forward is the raising of minimum monthly repayments levels to encourage people to pay off their debt faster and banning the practice of increasing credit limits without prior consent.

A change in the rules that set out the order in which debts built up on a credit card are paid off has also been called for, so that the most expensive debt is settled first rather than last.

Meanwhile, concern about interest rates being increased without proper explanation means the Government is also considering banning or restricting the re-pricing of existing debt.

"For far too long the card companies have been able to get away with practices that are not in the best interests of the consumer," said Michelle Slade, spokesperson for

She added that many consumers are unaware that on most credit cards, the most expensive debt is paid off last, while some companies had recently reduced the minimum payments it customers were required to pay.

"This will only store up problems in the longer term, as the total amount the consumer ends up paying will be much greater," she explained. "Increasing the minimum repayment will reduce both the total interest paid and the time it takes to clear the debt and will have a positive impact for most customers."

Find the best credit card for you - compare credit cards

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 Any products featured may be withdrawn by their provider or changed at any time.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

Top credit cards for Christmas spending

‘Tis (just about) the season to be jolly, but before all that festive fun begins, chances are you’ve got a bit more shopping to do. But, if you’re turning to credit to fund things, you’ll want to use cards that offer 0% interest deals on purchases.

Spooky reality of high balance transfer fees

Credit card debt is scary at any time of year. While most might assume that opting for the longest deal on offer would save them the most, our data shows some of the longest deals can actually work out to be the most expensive.

Reward credit cards that become ‘pointless’

If you regularly use cards to pay at the till, you may have considered opening a reward credit card to earn points every time you spend. However, not all of these cards are as rewarding as they may seem…