Credit card interest could be capped
As part of a crackdown on credit cards and store cards, the Government is considering capping interest rates in a bid to get the consumer a fairer deal.
Following the Government’s review into consumer borrowing, Consumer Minister, Edward Davey, and Financial Secretary to the Treasury, Mark Hoban, have asked industry experts for their views as to how consumers can get a better deal.
The move is expected to save consumers in the region of £300 million a year.
Commenting on the review, Mr Davey said: “I want to encourage both [customers and lenders] to take responsible decisions and to strengthen protection where necessary – particularly for the most vulnerable.”
The Government plans to publish its proposals from the findings of the review in 2011.
The report comes as average credit card interest rates have soared over recent times – despite the Bank of England’s base rate being held at the historically low rate of 0.5% since March 2009.
Experts say providers have been passing on the cost of a rise in defaults – reflected by the squeeze on British households due to the recession.