Government plans to curb “unfair” credit card terms

The government has put forward a series of proposals to outlaw unfair credit card terms. These include stopping card firms raising interest rates on existing debts, and increasing someone’s spending limit without first asking their permission.

Under the proposals, credit card companies would also have to ensure that a customer’s most expensive debt is paid off first, and the size of minimum repayments would be raised in order that debts be paid off faster.

The UK Cards Association (UKCA), which represents British card issuers, said it would study the proposals.

“We need to be able to demonstrate what impact these would have on consumer choice and the costs to customers of using credit cards,” said UKCA chairwoman Melanie Johnson. “We will be reviewing the evidence and we expect the government to do the same.

“These proposals risk disadvantaging more customers than they protect,” she added.

The government has called on credit and store card companies to “clean up their act” with regard to “unfair” charges that are not explained properly to the customer.