Changes to credit card regulation criticised

While measures proposed by the UK Cards Association to change the way Britons pay off their credit card debt have been described as a “good start” by a financial planner, he worried that the action might be “too little too late”.

According to Martin Bamford, chartered financial planner at Informed Choice, the proposed changes could help credit card companies clean up their practices, but he suggested that more could be done in terms of how payments are allocated.

He added that while such legislation offers borrowers some protection, individuals need to take responsibility for their own debts and carefully manage their money to avoid getting into financial difficulty.

The proposed package from the UK Cards Association would see all credit card payments among the minimum payment allocated so that the most expensive debt would be paid off first.

A survey carried out by Nationwide Building Society last month indicated that some two-thirds of credit card holders do not understand the order in which their repayments are allocated.

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