Government to restrict credit card debt

The Government has an intention to stop consumers from gathering more credit card debt by forbidding credit card institutions to stretch credit card limits, and by prohibiting unrequested credit card cheques.

Using credit card cheques might result in accumulating more credit card debt as they normally entail a higher charge compared to your credit card.

The Government hopes that placing limitations on the use of consumer credit will bring about a more rational attitude to credit card lending. As a result, this is supposed to lead to a substantial drop in the amount of credit card debt.

Consumer Affairs Minister, Gareth Thomas, said they found it alarming that consumers may borrow more than they can afford if borrowing limits are extended without requests about this made by borrowers, or if unsolicited credit card cheques are sent out to them.

In an attempt to refute the statement that credit card lenders are welcoming further levels of credit card debt, APAC,  UK payments association, stated that it was not a common practice among its members to stretch the credit card limits of consumers with unmanageable debt problems.
 


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