1 December 2008
Borrowers experiencing repayment difficulties on their credit cards could soon be offered more support by lenders.
Following a meeting with Business Secretary Lord Mandelson last week, card providers have agreed to give struggling customers more "breathing space".
The move comes after Prime Minister Gordon Brown urged credit card companies to adopt a more responsible approach to lending.
In a joint statement, the government and the industry said consumers who are working with debt advice agencies on draft repayment plans will be offered a 30-day suspension on debt collections.
This will give them time to organise their finances and, it is hoped, prevent debt problems from spiralling out of control.
In addition, credit card providers have agreed to report back to the government in two weeks on a set of fair principles for the industry, which should be applied when lenders are thinking about re-pricing.
Consumers could get a better deal by switching to a different lender and transferring their existing balance to another credit card.