Further restrictions for credit card providers

Credit card providers are face further restrictions on their lending regulations, as the government tries to curb the level of credit card debt in the UK. A number of measures are to be brought in by the government to try and curb credit card debt, and also to reduce the level of temptation faced by credit card customers to get themselves further into credit card debt.

Many credit card firms tend to increase the credit limit for their customers automatically, even if the customer has not asked for the credit limit increase, and this is something that the government wants to crack down on. The government wants firms to stop raising credit card limits unless credit card customers have specifically asked for an increase.

Also, credit card cheques have become an issue that the government plans to tackle, as these cheques are now sent out by many credit card firms. Many consumers are tempted into using these cheques to make payments or put money into their own accounts, not realising that the interest charged is at the high level of credit card interest.

Gareth Thomas, the Consumer Affairs Minister, said: “We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited credit card cheques. It’s vital we protect consumers at this time and we are exploring these issues carefully.”