|Credit cards - why not impose a cap?
||[Mar. 18th, 2009|02:33 pm]
Tough times are on the way for credit cards. Not only are consumers whacking less on 'plastic', the Government is planning to ban two of the industry's most reckless practices - unrequested increases in spending limits and credit card cheques - as revealed by the Independent. www.independent.co.uk/news/uk/home-news/ministers-get-tough-on-16353bn-credit-card-industry-1644926.html|
Now the Conservatives say they will impose a cap on interest rates. Credit card rates are about 16 per cent. The Bank of England base rate is 0.5 per cent.
The Conservative Treasury spokesman Mark Hoban said this week: "We will force credit card companies to give consumers much clearer information about borrowing costs, impose a cap on extortionate store card interest rates and launch Britain's first free national financial advice service."
About time too. But we don't know the level of the proposed cap. If it's set too high, say 40 per cent, it will only help a few customers. As ever with financial matters, the devil is in the detail.