Credit card holders 'will benefit from industry changes'
The UK Cards Association (UKCA) has suggested ways to help spenders regain control of their finances by reducing the pressure on credit card holders paying off debts.
Credit card holders 'will benefit from industry changes'”
Melanie Johnson, chair of the association, said: "The credit card industry is keen to give consumers as much control of their finances as possible."
She added that the plans will "deliver big improvements to customers without smothering competition and choice, which customers value and gain significant benefit from. It will also maintain features which are vital to lenders being able to lend responsibly."
The proposed package includes an industry-wide change to the 'allocation of payments' practice, so all payments above the minimum are put towards paying the most expensive debt first.
The practice of unsolicited credit limit increases for customers struggling with money management will be banned. Other account-holders will be offered a 30-day notice period and a way to 'opt-out' of the increased credit limit.
Card companies will also help customers struggling under the tough financial climate by contacting those who repeatedly pay only the minimum each month to let them know this is an expensive way to make repayments.
Out of the 30.2 million British credit card holders, 60 per cent pay their bill in full each month, according to UKCA figures.
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