Credit Card Providers To Face Further Clampdown
October 6, 2009
Credit card providers in the UK are set to face a further clampdown as the UK government brings in measures to cut the temptation of further credit card debt for consumers. The government is looking to bring in a number of measures that could decrease the chances of consumers getting themselves even further into debt at a time when the credit card and other debt levels in the UK are already causing concern.
One of the measures that the government is bringing in is to stop credit card firms from automatically increasing customers’ credit limits. At present credit card providers review the accounts of customers periodically and then increase their limits accordingly, letting them know by post. However, whilst the customer may not have really wanted the credit limit increased once this is done the temptation is there to spend on the card, which puts the cardholder even deeper into debt. The government wants this practice to stop, and for credit limits to be increased only at the request of the cardholder.
Another thing that many credit card providers have been doing over recent years is sending out credit card cheques to customers, which can then be written like normal cheques. Customers can even write themselves a cheque and put it in their bank, with the amount then coming off their credit card. However, many do not realise that they are then charged high credit card fees for using the cheques. This is something else that the government wants to put an end to.
The Consumer Affairs Minister, Gareth Thomas, said: “We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited credit card cheques. It’s vital we protect consumers at this time and we are exploring these issues carefully.”
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