A series of changes to how
Plans published by the Department for Business, Innovation and Skills will include an end to the practice of most lenders that ensures the cheapest debt is paid off first and the most expensive last, which causes customers to pay more interest.
It will also seek to help debt reduction with higher minimum payments, ban or restrict the increasing of credit limits without customer consent and limit the ability of card providers to raise the interest rate chargeable on pre-existing debt.
A public consultation on the plans will last until January 19th.
Consumers minister Kevin Brennan commented: “I want to hear from the most important people, the customers, about their experiences and to get their views on our proposals.”
Citizens Advice welcomed the proposed changes as a way of helping those with debt management issues.
Director of public policy at the charity Theresa Perchard said they could help ensure that consumers are “no longer sleepwalking into debt”.