Debt management help proposed by credit card industry
Debt management help proposed by credit card industry
Tuesday 19th January 2010
Altering allocation of payments, imposing a ban on unsolicited credit limit increases for vulnerable customers, and added transparency are among the proposals outlined by the UK Cards Association.
The organisation has submitted its intentions to the Department for Business, Innovation and Skills consultation on credit and store cards.
Other incentives include lenders contacting customers who repeatedly make minimum repayments to inform them that this is the most expensive way to repay debt, and information will be simplified to make it easier for consumers to understand the implications.
Association chair Melanie Johnson said: "The credit card industry is keen to give consumers as much control of their finances as possible.
"Our approach will deliver big improvements to customers without smothering competition and choice, which customers value and gain significant benefit from. It will also maintain features which are vital to lenders being able to lend responsibly," she added.
According to figures from the UK Cards Association, 46.7 million adults (94 per cent) held either a debit, credit or ATM-only card issued by a bank or building society in 2008.
Some 38.6 million adults used their card at least once a month to make purchases in the UK.
Meanwhile new research by housing charity Shelter revealed that more than one million people in the UK used credit cards to pay their mortgage or rent over the last 12 months.
People from working class professions represented the highest proportion of those who had resorted to the drastic measure.
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