The Consumer White Paper, published today, proposes a number of measures that will change how credit card firms interact with their customers:
- they will be banned from raising credit limits without asking the customer first
- unsolicited credit card cheques will be banned
- they will not be able to raise interest rates on existing debts
- repayments will have to be put towards paying off the most expensive debt, rather than the cheapest as most now do.
However, there is of a course downside, monthly payments will have to rise. Which ironically will hit hardest that section of the community (ie the poor and debt burdened) which the White Paper allegedly was meant to help.
Have they really thought this through?
Surely a better course of action would have been to pressurise the companies to reduce their extortionate interest rates (17% or more), in the face of base rates that are 0.5%?