Financial Facts views the the key objectives of government’s proposed measures to be aimed at preventing credit card companies from continuing an “unfair” relationship with consumers.

Government wants to stop credit card providers from raising interest rates on existing debts and to ban the raise of a customer’s credit limit without consent.

Customer’s most expensive debts will be prioritised for repayment, while a rise in the size of repayments aims to speed up debt repayment.

UK card association to weigh up pros and cons

Financial Facts points out that the government proposals are some way from being implemented, with the UK card association currently pondering the ramifications.

“These proposals risk disadvantaging more customers than they protect,” Melanie Johnson, chair of the UK Cards Association told the BBC. “We need to be able to demonstrate what impact these would have on consumer choice and the costs to customers of using credit cards.”

Consumer minister slams ‘unfair’ terms and conditions

Financial Facts understands the government’s main concern to be the exploitation of consumers in the form of “baffling” terms and conditions.

Consumer Minister Kevin Brennan said: “It is not acceptable for card companies to impose complex and confusing terms and conditions that can leave people baffled, or to increase interest rates without proper explanation.”

“Consumers should not feel each month as if they have been exploited or disadvantaged,” he added.

Support for measures from consumer organisations, opposition parties

Consumer organisations welcomed the proposals. Financial Facts points to comments made by Malcolm Hurlston of the Consumer Credit Counselling Service (CCCS).

Hurlston said: “The government has put its finger on the four main problems that consumers have with credit card debt.”

Financial Facts found support for the government’s proposals from both the Conservatives and the Liberal Democrats, though both parties called the measures “overdue”.

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