The Government’s proposed plans to end credit card rips offs have been rejected by credit cards providers. This probably comes as little surprise when you consider how the providers are able to profit from such policies, which generally he UK Cards Association, which represents British credit card providers was presented with a set of proposals from the Government at the end of 2009. They included:
- Setting a regulation that card companies must contact customers who repeatedly only make the minimum payment on their cards.
- Banning unsolicited credit limit increases for customers suffering repayment difficulties.
- A notice period of 30 days in which any other customer can opt out of a proposed credit limit increase.
According to USwitch.com, 5.7 million consumers had their credit limits increased in 2009 without their consent. While 43% of British consumers confess that they would be happy with a sudden increase, 50% would not.
Surely, however, random credit limit increases like this only serve to encourage excessive lending and spending? And surely that, in the wake of the toughest recession in a generation, cannot possibly be a good thing.
Either way, these were Government ‘proposals,’ without any element of force behind them. And as the credit card industry has rejected them, it seems unlikely they will go ahead.