Card firms agree to new fairness measures

12/12/2008

Credit card providers have agreed on "fair principles" to offer to customers.

Following talks with business secretary Lord Mandelson, the card firms have announced measures aimed at helping people who risk falling into credit card debt.

These are aimed at providing people who fall into arrears with some breathing space, through providers promising not to put up rates while they are struggling with repayments.

The "fair principles" therefore include the ability for firms to freeze accounts if the APR is changed - thereby allowing the customer to pay off their debts at their previously-agreed rate.

Firms also agreed not to increase the APR if the customer has failed to make their minimum monthly payment for over two months or is involved with resolving their debts through putting in place a payment plan or consulting with a debt advice firm.

"I recognise that these changes will not be without financial pain for credit card companies, but it was vital that we nipped in the bud the bad practices that were causing real hardship for borrowers," consumer minister Gareth Thomas commented.

Tags; Debt Management and Banking, Credit Card Lifestyle,

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