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Credit Card Industry Could Face Wide Ranging Bans

UK financial regulators and campaigners have been fighting for increased fairness from credit card firms over recent years, and more recently even the government has got involved in trying to get banks to act more fairly with its customers with regards to a variety of issues, such as the charges and interest rates applied to customer accounts.

A decision was made recently to crackdown on credit card firms to try and decrease the risk of debt amongst consumers, and one measure has already been put into place. Credit card firms will no longer be able to send out unsolicited credit card cheques to consumers, which are blank cheques that the consumer can write to make purchases or even to transfer money into a bank account, but which are charged at the same rate as credit card cash transactions.

However, whilst this is a measure that has already gone through there are a number of other measures that are being considered by regulators and campaigners that could cause problems for the personal finance industry but could prove beneficial for consumers. This includes the credit card allocation of payments, where more expensive debt would have to be paid off first rather than being kept until last, which is currently the case and is often found on 0% balance transfer credit cards.

The measures have formed part of a white paper that was put together by the Business Secretary Lord Mandelson. He said that his measures were designed to help consumers and to ensure that they were able to make better decisions with regards to borrowing. Increases in spending limits without request from the cardholder may also be banned as part of the new measures, and a study recently revealed that many customers had found that their credit limit had been increased without them asking for this to be done.

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