New credit card protections advised
By UK CreditCards.com
The UK Cards Association is proposing a host of changes to help Britons manage their credit card debts more efficiently.
According to the industry representative, all payments above the minimum level should be allocated to the most expensive debt -- a move which would benefit over a quarter of the country's credit card accounts.
In addition, the association is pushing for a ban on unsolicited credit limit increases, suggesting that cash-strapped consumers should be given a new 30-day notice period and the chance to 'opt out' of any increases.
Melanie Johnson, chair of the UK Cards Association, claimed that the proposals -- which are in response to the government's 'Review of the Regulation of Credit and Store Cards' document -- will give Britons more control over their finances.
"Our approach will deliver big improvements to customers without smothering competition and choice, which customers value and gain significant benefit from," she said.
"It will also maintain features which are vital to lenders being able to lend responsibly."
The UK Cards Association has also recommended that lenders should contact credit card holders who regularly make minimum repayments to inform them that this is the most expensive strategy.
A recent study by housing charity Shelter indicated that more than 1 million Britons currently use their credit cards to help meet their mortgage repayments.
Published: 22 January 2010
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