Government seeks action on credit card debts

28 November 2008

Consumer Affairs Minister Gareth Thomas and Business Secretary Lord Mandelson are meeting with representatives of the credit card industry today, to discuss the interest rates they charge and the way they deal with people in debt.

Even though the base rate has dropped to 3%, the average interest rate on a credit card is over 17%, The Guardian reports.

Mr Thomas said: “The government is deeply concerned that borrowers aren’t getting a fair deal. That’s why we’ve taken swift action to bring the industry in to look at how costs are being applied to people’s existing debts.

“We want to work constructively with the industry to draw up a set of principles that will enable them to keep lending and will also ensure borrowers are treated fairly and in a way that best helps them pay off their debts.”

“It’s good to see the Government taking this kind of constructive approach to credit card debt,” said a spokesperson for debt management company Gregory Pennington. “Together with the small minimum monthly payments required, high interest rates can turn a relatively small credit card debt into a much larger debt – the kind of debt that someone can spend years paying off.”

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Gregory Pennington offer debt management plans as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.

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Gregory Pennington are founder members of DEMSA (Debt Managers Standards Association).

DEMSA are the first trade body within the finance industry to successfully secure approval for its code of practice under the OFT Consumer Codes Approval Scheme (CCAS).