The government has announced plans to help consumers that may be tempted to build up credit card debt they cannot afford.
Consumer affairs minister Gareth Thomas revealed that credit card companies are to be targeted by new legislation.
It will prevent firms from raising the limit on what can be borrowed unless a customer asks for the measure, as concerns have been raised over assumptions that a higher limit persuades consumers that they can afford more than is the case.
Mr Thomas noted that helping people with debt management in the current economic climate is “vital”, adding: “We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers.”
Last week, Abbey urged consumers to reduce their credit card debt by switching to deals that do not charge interest, after finding that over £9 billion is being paid by Britons each year.
By Andy Mackay