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Credit card legislation 'a step in the right direction'
New credit card legislation which aims to put the power back in the hands of consumers is 'a step in the right direction', according to Credit Action.
The government announced plans to prevent lenders from raising interest rates on credit card debt without consumer consent. The proposed changes would also allow consumers to pay off the debt with the highest interest first.
It is hoped that the new rights for consumers will give people more control over their finances and provide better repayment plans to get out of debt. The government estimates that the new legislation will also save consumers around £300 million a year.
In February, Moneyfacts.co.uk produced research that suggested credit card rates are currently at their highest level for 12 years with the average rate now standing at 18.8 per cent.
Despite the positive steps in changing the order debt is paid off and capping rates, debt organisations are calling for the government to do more.
Chris Tapp, director of Credit Action, said: "There is real substantial progress here but it has not gone as far as we would have liked it to."