Credit card rights information to reduce debt?

Credit card debt is a problem for many people and while sometimes it is caused by people recklessly overspending on plastic, it is widely agreed that the providers are often culpable themselves.

This can be for a range of reasons, such as increasing credit limits without being asked and including hidden charges for things like overseas cash withdrawals.

Amid such concerns, the UK Cards Association has announced the publication of a new plain English guide to the rights consumers have when using their cards, which will be available online and also be available at every Citizens Advice Bureau in Britain.

This will include elements like how people can complain, where to get information and what to do in the event of financial difficulties.

And this is just one of the actions the UK Cards Association's members have agreed to undertake, including the provision of an annual statement to each customer to show how they have used their card, with a full breakdown of all fees and charges incurred. There have also been curbs on hidden charges such as overseas use.

How effective this will be in trimming credit card debt, however, is debatable. The Daily Telegraph has just noted how the number of complaints to the Financial Ombudsman Service in 2011/12 was at its highest (19,183) since records began in 2001.

While it may be that the greater financial difficulties some customers are in could be motivating more to seek recompense, it would seem many card providers are talking a good game but not delivering.

Commenting on the UK Cards Association move, Andrew Smith of Cleardebt said: "Anything that encourages more dialogue between card company and card holder is good: Cards still don't feel like spending real money to some – the annual statement is a welcome reminder of just how important a cased is – and how much it costs.

"But once a year may not be frequent enough to encourage people to exercise proper control of their spending," he cautioned.

Posted by Paul Thacker