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The Department for Business, Innovation and Skills (BIS) response to January's credit card consultation includes new rights to give consumers more control over their credit and store cards.
The Government launched a review of credit and store cards in a consumer White Paper in July last year. Following a three-month consultation, BIS are setting out five new consumer rights which they believe will give consumers a fairer deal to consumers with credit and store cards. The Government and the card companies have agreed that the key consumer benefits will come into effect by the end of the year, meaning that consumers do not have to wait for legislation to be passed to benefit from these measures.
The five new rights are:
For consumers opening new accounts the minimum payment will always cover at least interest, fees and charges, plus 1% of the principal to encourage better repayment practice. Also consumers who are at risk of financial difficulties will be given guidance on the consequences of paying back too little and be protected through a ban on increases in their credit limit as well as increases in their interest rate.
For further information about the regulation of credit and store cards review visit the BIS website
More...
The Government launched a review of credit and store cards in a consumer White Paper in July last year. Following a three-month consultation, BIS are setting out five new consumer rights which they believe will give consumers a fairer deal to consumers with credit and store cards. The Government and the card companies have agreed that the key consumer benefits will come into effect by the end of the year, meaning that consumers do not have to wait for legislation to be passed to benefit from these measures.
The five new rights are:
- Right to repay: consumers’ highest rate debt first will be paid off first when repayments are made;
- Right to control: consumers will be able to opt out of credit limit increases, reduce their limit at any time and have better automated payment options;
- Right to reject: consumers will be given more time to reject increases in their interest rate or their credit limit;
- Right to information: all consumers will be given clear information on increases in their interest rate or their credit limit including the right to reject; and
- Right to compare: consumers will have an annual statement that allows for easy cost comparison with other providers.
For consumers opening new accounts the minimum payment will always cover at least interest, fees and charges, plus 1% of the principal to encourage better repayment practice. Also consumers who are at risk of financial difficulties will be given guidance on the consequences of paying back too little and be protected through a ban on increases in their credit limit as well as increases in their interest rate.
For further information about the regulation of credit and store cards review visit the BIS website
More...
