Joint Commitment to Credit Card Customers

New Consumer Credit Card Protection Agreed

The UK Cards Association and the Department for Business, Innovation and Skills (BIS) have reached a joint commitment as a result of the recent consultation regarding the ‘Review of the Regulation of Credit and Store Cards’.

Credit card companies have agreed their commitment to support customers’ interests by making sure that customers are able to control and manage their finances.

New Terms

Part of the agreement lead to the proposal that monthly repayments should at least cover interest, fees and charges, plus 1% of the amount spent.

Additionally, the previous decision to raise the minimum payment required each month has been abandoned.

The changes are set to come into force by the end of January 2011 and also include:

Ensuring the highest cost debt on a credit card is paid off first.
A ban on those in financial difficulties being offered an unsolicited rise in their credit limit.
Any customer offered a credit limit increase will be offered a new 30-day notice period for ‘opting-out’.
A 60-day period for people to reject a change to the interest rate on their existing debt. If they reject it they must close their account.
Card companies will contact any customer who repeatedly only makes the minimum repayment to make clear that this is the most expensive way of paying off a debt.
Card companies will work with debt advice agencies to agree how they might further identify consumers at risk of financial difficulties.

Payplan

If you are struggling with credit card debts or are finding it hard to meet your monthly repayments, contact Payplan today for free, confidential debt advice or call 0800 280 2816.

Written by Becky on March 15th, 2010

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