In summer 2009 the Government initiated a review of the market in a consumer White Paper and gave a warning to credit and store card companies to straighten out their acts.

Prime Minister, Gordon Brown, said that the cost of borrowing would be lowered after new rights, coming into force by January 2011, would terminate careless lending practices.

According to new regulations, consumers will be able to reject any jumps in their credit limit and they will have an opportunity to refuse from changes in the interest rates imposed on their current debts during the 60-day period.

Furthermore, new rules will also mean a change in priority order for credit card quittances. Thus, the most expensive debts will have to be redeemed earliest in order.

Such a change is supposed to bring about the reduction of the amount of money that borrowers will have to pay off and lessening the amount of time needed for some to liquidate their card debts.

At this moment, only a few lenders guarantee that the most expensive debt on a card are redeemed first.

Peter Vicary-Smith expressed his delight about the news on behalf of the consumer group “Which?”. However, he had to admit that still much would have to be done for the vulnerable consumers to be protected.

Recent studies has shown that although the Bank of England’s base rate stayed at a low rate of 0.5% for one year, credit card interest rates have soared to more than 18%, which has been registered as the highest level since 1998.

Many experts maintain that providers are using the practice of passing on the cost of a rise in defaults, which results in the pressure on British families because of growing unemployment.


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The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.