Good news for local people in Bedford and Kempston. On March 15 2010, the Government announced greater protections for credit card holders following an agreement struck with the credit and store card industry.
The Government is setting out five new consumer rights, which will give consumers a fairer deal and more control over the way in which they can choose and use their credit and store cards.
The five new rights are:
· Right to repay: consumers’ repayments will always be put against the highest rate debt first. For consumers opening new accounts the minimum payment will always cover at least interest, fees and charges, plus 1 per cent of the principal to encourage better repayment practice.
· Right to control: consumers will have the right to choose not to receive credit limit increases in future and the right to reduce their limit at any time; and consumers will have better automated payment options. Consumers will be able to do both of these online.
· Right to reject: consumers will be given 60 days to reject increases in their interest rate or their credit limit.
· Right to information: consumers at risk of financial difficulties will be given guidance on the consequences of paying back too little; and all consumers will be given clear information on increases in their interest rate or their credit limit including the right to reject.
· Right to compare: consumers will have an annual statement that allows for easy cost comparison with other providers
In addition, consumers who are at risk of financial difficulties will be protected through a ban on increases in their credit limit as well as the ban on increases in their interest rate, and card companies will work with debt advice agencies to agree new ways they will provide targeted support to consumers at risk to help improve their situation before they are in too deep.
These new rights, together with the existing right to redress, mean a better deal for consumers, giving them improved control of their credit and store card borrowing.
This is an important step forward for local people’s rights in terms of managing their own finances. It’s estimated that these reforms will save the average credit card user around £224 a year and consumers UK-wide well over £300m a year. So while the economy is still recovering, this represents an important boost to individuals and families still coming through the financial downturn.
Step by step, the Government is transferring more and more power back to consumers, and at the same time, eliminating the irresponsible lending practices that resulted in the financial crisis.
This can be a confusing area, so it is all the more important that the public be confident that the Government is acting in their best interests. This is a big win for consumers. It is only right that local people be in charge of their finances, and I welcome this announcement.
