A new agreement between credit card companies and the government is set to benefit borrowers who are struggling to pay off their debts.
The two parties have agreed a set of ‘fair principles’, which will result in lenders no longer being allowed to increase their charges at short notice.
Consumer affairs minister Gareth Thomas gave credit card companies a two-week deadline to draw up a statement of fair principles, which was handed over at a meeting on Thursday.
Included in the plan is the agreement to give borrowers at least 30 days’ notice of any increase in charges, as well as offering customers an alternative if their rates are increased.
Mr Thomas explained that while the new plan will create “financial pain” for lenders, it will benefit those struggling to repay their credit card debt.
“These commitments will help families manage their finances and cope with repaying their debts,” he remarked.
Research by MoneyExpert.com has revealed credit card applications are becoming more frequent, as November saw a 16.5 per cent increase in requests for credit compared to figures from 2007.
By Tom Musk