Raising card rates without warning ‘should be banned’

Credit card providers should be barred from raising the interest rate on their products without giving customers prior notice, an MP has said.

Member for Runcorn Mike Hall stated that he felt the government should go further than its recent set of proposals for regulating practices in the industry, the Runcorn and Widnes Weekly News reports.

He stated that the way some companies raised interest rates without telling cardholders first is the practice that caused him the most concern.

He said: “Consumers using their cards responsibly and making payments on time should not pay the price for excessive risk-taking by financial institutions.”

The ideas put forward by the government recently included banning the practice of making payments apply first to the least expensive debts, with the charges on which greatest levels of interest were levied being at the back of the queue.

Despite the debt management problems felt by many consumers, the British public has not yet ended its “love affair” with plastic, director of finance charity Credit Action Chris Tapp said recently.

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