Credit Cards

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   Credit card holders will be offered greater protection from spiralling debts, although the changes are watered down from original proposals. 
Consumers will be given 60 days to reject changes in the interest rates charged on their existing debts. 
They will also be able to opt out of any increases in their credit limit. 
The agreement comes after the credit card industry met the government's original proposals with a strident 230-page defence of its methods. 

A proposal to raise the minimum amount that borrowers must pay off each month has been dropped. 
Existing credit card accounts will maintain their current rules on the level of minimum repayments, which vary from lender to lender. 
But new accounts will be covered by a new rule - that monthly repayments should at least cover interest, fees and charges, plus 1% of the amount spent. 
"In our consultation it was made quite clear by consumers that they might not be able to manage their current debts if they had to pay off more each month," said the Consumer Minister Kevin Brennan. 
"People with several cards would have had less flexibility to deal with their debts." 

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Keymaster Members Profile Find Members Posts Forum Regular Joined: 27 Sep 2008 Online Status: Offline Posts: 363	Quote Reply Topic: Credit Cards Posted: 15 Mar 2010 at 20:33
	Credit card holders will be offered greater protection from spiralling debts, although the changes are watered down from original proposals. Consumers will be given 60 days to reject changes in the interest rates charged on their existing debts. They will also be able to opt out of any increases in their credit limit. The agreement comes after the credit card industry met the government's original proposals with a strident 230-page defence of its methods. A proposal to raise the minimum amount that borrowers must pay off each month has been dropped. Existing credit card accounts will maintain their current rules on the level of minimum repayments, which vary from lender to lender. But new accounts will be covered by a new rule - that monthly repayments should at least cover interest, fees and charges, plus 1% of the amount spent. "In our consultation it was made quite clear by consumers that they might not be able to manage their current debts if they had to pay off more each month," said the Consumer Minister Kevin Brennan. "People with several cards would have had less flexibility to deal with their debts."

Hi Members Profile Find Members Posts Forum Regular Joined: 21 Nov 2009 Online Status: Offline Posts: 167	Quote Reply Posted: 15 Oct 2010 at 10:59
	Plans could make it easier to switch credit cards for a better deal A cap on excessive interest rates charged on credit and store cards is being considered as part of a review of consumer borrowing. The government wants experts' views on how consumer credit, such as credit cards and store cards, can be fairer. This includes discussion on whether the regulator will be able to put a limit on high interest rates charged to those who might have difficulty repaying. Bank charges and personal insolvencies are also covered by the review. The review will inform government proposals on changes to the industry to be published next year. 'Responsible' The Treasury and Department for Business want to know how people can better manage borrowing, and improve the help available for those who get into difficulty. Areas of review include: Dealing with unfair bank charges A seven-day cooling off period that would allow people to return store cards without charges Powers for the regulator to cap interest rates on credit cards and store cards Electronic statements from credit card providers so customers can decide whether to switch to a better deal "I want to encourage both [customers and lenders] to take responsible decisions and to strengthen protection where necessary - particularly for the most vulnerable," said Consumer Minister Ed Davey. "If things go wrong people face a confusing array of debt remedies, so I also want to examine how the existing insolvency regime can be made to work better."

Julie Members Profile Find Members Posts Forum Member Joined: 12 Oct 2009 Online Status: Offline Posts: 53	Quote Reply Posted: 29 Nov 2010 at 17:08
	The amount of money written off by banks on credit cards fell sharply in the third quarter of the year, Bank of England figures show. A total of £740m was written off, the lowest figure since the first quarter of 2008. This is 35% of the £2.1bn record write-off in the second quarter of 2010. The fall may be due to an improvement in people's finances, reflected by a drop in personal insolvencies and home repossessions this year. But David Black at the financial consultancy Defaqto suggested it reflected the impact of more restrictive lending. "It looks as if banks are benefiting from their decision a few years ago to be more careful about who they lend to, especially with unsecured lending," he said. Back to trend Banks regularly write off large amounts of the money spent on their credit cards when it becomes clear that the card holders will not repay. The sums cancelled have at times amounted to 10% of all the outstanding lending on the cards. These high losses explain why banks and other lenders charge much higher rates of interest on their cards than they do for secured forms of lending such as mortgages. Write-offs on mortgages, while much lower than on credit cards, also fell, from £184m in the second quarter of 2010 to £134m in the third quarter. Taking into account other forms of lending, such as bank loans, all bank write-offs fell in the same period, from a record £3.5bn to £1.8bn. "Changes in some banks' accounting practice during the first half of the year resulted in larger numbers for the first two quarters, however third quarter figures have moved back into line with the previous trend," said David Dooks, director of statistics at the British Bankers' Association.