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March 18, 2009    

Law to reduce credit card debt to be introduced

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by Peter Charalambous
Law to reduce credit card debt to be introduced

In the credit crunch era, the government in about to introduce new plans to help make sure that credit card companies are responsible lenders and are stopped from increasing limits without agreement from the cardholder.

It is hoped that by restricting the levels of consumer credit it can bring an end to irresponsible lending, although the proposed by the department Business, Enterprise and Regulatory Reform is primarily aimed at those consumers who are unaware as to the high level of interest and the payback period.

The department Business, Enterprise and Regulatory Reform was also announced that sending through unsolicited credit card cheques will also be addressed in the new reforms as these are often used as a tool to influence spending and increase debt.

The BERR it taking responsibility on the fairly unregulated market of credit cards as they issued a statement saying that it is vital that at this current time all areas of regulation and debt avoidance are explored.

On the other hand APACS, the UK trade association for credit cards and payments services remain unconvinced as to the need for new legislation.

Enforcing the new rules they say is not the best way of making sure that the most vulnerable consumers are being protect and that the credit card industry has always had its own measures to managing consumer debt and that raising limits and offering cheques are only made to the appropriate consumer after thorough credit checks.

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