15 December 2008
Credit card companies have agreed to abide by a set of fair principles that are designed to protect consumers from high interest rates and charges.
Following consultation with the government, card providers were given two weeks to report back with their proposals. They have agreed to give customers at least 30 days notice when rates are set to increase and make it easier for them to close their accounts if they are unhappy.
In addition, they have agreed not to put up rates for customers who have sought help from a debt advice agency or have failed to make their minimum payments for two months or more.
Consumer Affairs Minister Gareth Thomas said: "These commitments will help families manage their finances and cope with repaying their debts."
Research carried out recently by AXA revealed that of the 11.6 million people who are experiencing financial problems in the UK, over 3.7 million believe they are unable to cope with their credit card debts.
Consumers paying high interest rates on their existing credit card could benefit by switching to another provider.