Government unveils new protections for credit card holders
By myfinances.co.uk staff
New "rights" for credit card holders designed to increase consumer protection and reduce debt repayments have been revealed by the government.
The changes, which were based on public feedback and agreed with the industry, will be introduced by lenders later this year.
They afford borrowers the right to have repayments go towards the debt with the highest rate of interest first and to opt out of unsolicited increases in their credit limit.
Furthermore, card holders will be given more time to reject interest rate hikes and there will be more advice on managing debt for vulnerable customers.
Finally, card providers will be required to give customers an annual statement allowing for easy cost comparisons with other lenders.
Prime minister Gordon Brown said: "These new rights will put an end to the irresponsible lending practices that people have been most concerned about and help cut the cost of borrowing."
The UK Cards Association estimated that the changes will save credit card users around £533 million a year.
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