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New deal for credit card users from January 2011
The new deal took account of feedback from thousands of consumers to a government consultation on credit cards. If you use a credit card, the changes that will affect you are:
A key change is that your payments will go towards clearing the debts on which you're charged the highest interest first. Previously, you could not repay your most expensive debt until after you had repaid debt charged at lower rates.
The government expects the new rights to save consumers almost £300 million a year. An industry forecast has placed the figure at £500 million.
Prime Minister Gordon Brown said: "Step by step, we are moving the balance of power back towards consumers. These new rights will put an end to the irresponsible lending practices that people have been most concerned about, and help cut the cost of borrowing."
Consumer Minister Kevin Brennan said: "We discovered most people did not know the charges worked this way. They thought it was unfair and confusing. They naturally wanted to pay off their most expensive debts first."
Find out more about the consultation by following the link belo
Review of the regulation of credit and store cards
Better deal for credit card users : Directgov - Newsroom
The new deal took account of feedback from thousands of consumers to a government consultation on credit cards. If you use a credit card, the changes that will affect you are:
- your most expensive debt will be paid off first, and minimum payments on new credit card accounts will cover more than they do at present
- better repayment plans will be offered to new customers
- if you are at risk of financial difficulty, your card company may be banned from extending your credit limit
- you will have the right to 60 days to reject interest rate increases
A key change is that your payments will go towards clearing the debts on which you're charged the highest interest first. Previously, you could not repay your most expensive debt until after you had repaid debt charged at lower rates.
The government expects the new rights to save consumers almost £300 million a year. An industry forecast has placed the figure at £500 million.
Prime Minister Gordon Brown said: "Step by step, we are moving the balance of power back towards consumers. These new rights will put an end to the irresponsible lending practices that people have been most concerned about, and help cut the cost of borrowing."
Consumer Minister Kevin Brennan said: "We discovered most people did not know the charges worked this way. They thought it was unfair and confusing. They naturally wanted to pay off their most expensive debts first."
Find out more about the consultation by following the link belo
Review of the regulation of credit and store cards
Better deal for credit card users : Directgov - Newsroom
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