Government to outlaw 'unfair' credit practices

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The government has announced plans to tackle 'unfair' credit card practices and charges.

According to the Department for Business Innovation and Skills, such charges could be outlawed under new proposals, which include prohibiting lenders from raising interest rates on debts.

Firms may also be prevented from increasing a cardholder's spending limit without authority, while minimum monthly payment restrictions could be tightened.

Consumer minister Kevin Brennan said the current relationship between card companies and consumers could not go unchallenged.

Offering his view, Which? personal finance campaigner Phil Jones said it is "simply wrong" to entice people into spending more than they can afford and then to squeeze as much money out of them as possible.

"The sooner these practices are stamped out, the better," he claimed.

Last week, a spokesperson for the Insolvency Helpline claimed that the number of people calling for advice on debt had increased during the recession.

He said the majority of callers are seeking help with personal debt issues.

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Tags: kevin brennan , credit card practices , consumer minister , payment restrictions , debt issues , personal finance , business innovation , personal debt , campaigner , cardholder , insolvency , recession , spokesperson , debts , lenders , interest rates , proposals , consumers , relationship , much money ,

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2009-10-29 16:47:57 © Moneyextra.com