October 27th, 2009 
admin Government credit card plans have sparked debate. Proposed government changes to credit card rules have met with a mixed response.
Credit card providers, consumer campaigners and other industry groups have reacted to the new plans from the Department of Business, Innovation and Skills (BIS) released today (October 27th).
The government announced plans to require larger monthly card repayments and impose restrictions on some APR increases.
Nationwide, a building society and credit card provider, welcomed the government proposal that the order of payments on credit card balances should be changed.
If this measure is adopted, providers would be obliged to reduce high-interest debts first when a customer makes a repayment on their outstanding balance.
Nationwide’s product and marketing director Chris Rhodes said: “We think all UK credit card providers should allocate payments in a positive way.”
Consumer Focus, a customer support group, also welcomed the planned reforms.
“When every penny counts, these proposals are a very welcome step towards helping consumers get a fair deal,” spokeswoman Linda Weatherhead said.
However, the Finance and Leasing Association said that it foresees problems with the government plans.
Fiona Hoyle, head of consumer finance at the industry group, commented: “We must avoid the risk of reducing further the availability of credit or increasing the potential for over-indebtedness.”
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