New legislation to affect credit card deals

Credit card cheques, credit limit increases may be banned

By UK CreditCards.com

Credit card legislation introduced The government is to introduce new legislation that will outlaw certain practices in the credit card industry.

If the legislation is passed, card providers will no longer be able to increase the limit on customers' credit without permission or send out unsolicited credit card cheques.

A number of consumer watchdogs, including Which?, have warned that the methods encourage consumers to spend more than they can afford and the government now appears to agree.

"We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited credit card cheques," said consumer affairs minister Gareth Thomas. "It's vital we protect consumers at this time and we are exploring these issues carefully."

Last year, the credit card industry agreed to a number of measures to help customers experiencing debt problems, following a meeting with the business secretary Lord Mandelson.

The firms at the meeting released a statement which promised "extra breathing space" for struggling borrowers.

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Published: 19 March 2009