Dear Mr Brown

I would like you to be aware of comments posted on the net and sent to the Credit Card Consultation. I hope you are able to appreciate that the general public really need your help and that we, as a nation, are struggling to feed and clothe our families, due to the extortionate interest rates banks are allowed to charge.

I live with my husband and children 14 & 12. We are good citizens; we pay our taxes, don’t break the law and work incredibly hard. We have a lovely family life and our children are growing up into mature, well mannered, respectful children we are very, very proud of. We have a mortgaged home, both have reasonable jobs (my husband runs a night shift and I work in the local high school) and on paper we should be nowhere near the breadline. But we are on it. With the current laws which allow credit card companies to increase interest rates on our borrowing from as low as 6.9% to, in some cases, 34.9%, apart from being downright ludicrous, the life we have is being threatened. We simply cannot continue in this way – we need swift action from you to lay down laws or guidelines that ban these immoral practices. Currently we have no disposable income, and sometimes are unable to meet all our bills. We cannot go onto the High Street with our hard earned cash and help the recovery. We live and work to pay the banks.

I am aware that I borrowed the money and totally hope I will be able to repay my debts in full. But the banks have changed the goalposts – not just a little bit – to a whole new continent! If I total it up I would fully expect the amount I have paid on most of my cards to have cleared the sums drawn against them. In truth I am frightened to analyse the figures as I fear the truth would put me in an early grave. And my family have no idea of the trouble I’m in. I would rather die than to admit to my dad, who has worked hard all his life, for the little they have, and never been in debt, we’re in a mess and I’ve let him down. In most cases we can only pay the minimum payment – on most cards this will only just cover the interest. Among our many debts we pay one company around £220 per month with only a few pounds coming off the capital. Surely this cannot be right?

I constantly dream up ideas of how the situation could be resolved, and have included a few in my posting which you can read by following this link:
http://www.bis.gov.uk/comments-on-credit-consultation/comment-page-37#comment-1833

My posts are on page 37. I appreciate you are a busy man and have a whole country to run, but I would really appreciate it if you could have a look through the thread and spend a little time thinking how you could help, and I mean really help, the many people this affects. This is just the tip of the iceburg and we really, really cannot take any more. I implore you as a father, as a husband and as the leader of our great nation, take note of our plight and do what is right to help us – the banks have had their help. Surely now it is our turn?

You are admired worldwide for your handling of many economic situations, non more so than when the world came together to deal with the recent banking crisis. I, for one, would like to see you return as Prime Minister in the spring to lead the country through the recovery. But before you are able to do that I feel you need to address a problem that is causing massive hardship across the country.

Thank you for taking the time to read about my plight. I hope you will be understanding and are able to put measures in place to help us.

If the lenders were forced to keep the interest rates low – either linked to the BoE base rate, or even around the level when the card was taken out – it would mean that for those many thousands of consumers who are only just able to make the minimum payment , myself included most months, would actually be able to reduce the capital on the debt. I am in a situation where I needed to use credit primarily to finish a building project when we were unable to increase our mortgage as the market had fallen and the extension wasn’t complete and therefore not adding the full benefit of the work onto the house value. We also used it for other things like to help at holiday times and treats etc. We were managing quite nicely but our rates were hiked, some up to 35%, from what was a low starting point (below 10%).

For what feels like years now we are meeting the minimum payments, by hook or by crook, but do not see our debt being reduced. As the interest rates are put up we sometimes find that, as we are at the limit on some cards, the interest added would take us over the limit a £12 fee would be added to the account. We are in a position where we have no disposible income – we cannot help the recovery by getting out onto the high street and spending our hard earned money – the greedy bankers are taking it to line their own pockets and create a ‘profit’ for the banks so they can receive obscene bonuses, whilst I am struggling to feed my children and I often have to go without meals myself, or eat out of date food, just to make sure my hubby and children don;t have to go without. We should not be on the breadline statistically. Our combined income is over £40k pa. I appreciate that we have borrowed the money and have to pay it back. We are more than prepared to do that, but we are unable to as all our salaries are going towards the interest (and charges) on our credit cards. Now we only use credit for necessities – food, essential clothes, fuel and as we have red gas and electric bills, our energy bills. Is this the face of a civilised society? When the credit card companies agreed to self regulate and treat the customer ‘fairly’ what did they mean? Bleed us dry? This situation is nothing short of legalised robbery. They are behaving just like loan sharks – preying on those who really need help.

Unless this situation is rectified soon there will be many thousands of people defaulting on their debts – although I am an honest person and want to clear everything I owe the banks are making it increasingly difficult and something has got to give – I am not prepared to continue ‘paying’ for them to effectively ‘own’ me. Why should they increase my interest rate just because I am struggling – are they trying to drive me into an early grave – people who would expect to be respected in society not giving a damn what happens to hard up customers.

I would so love to be free of my debt – OK, I would be credit blacklisted, but quite honestly if I could go back I would never have borrowed all the money and yes, I will not use again if ever I am free of this nightmare. I want to save and budget and spend within my means. I’m fed up of robbing peter to pay paul, but never having anything to pay back to peter.

A few ideas – use the quantative easing money to ‘buy’ the debt from the credit card companies at a similar rate that a debt company would. Ban anyone with large or longstanding debts/credit problems from applying for credit/store cards ever. For the credit worthy keep the limits realistic and review more regularly – link lending to salary and ability to pay. Put in place strict guidelines on the minimum payment to be made, the allocation of payments, and most importantly the scandalous interest rates – if the country’s population has generally good personal finances the country on a whole will prosper and grow. If we are shrouded in debt the recovery will be long and slow. The priviliged and the diligent will have money available – but will they choose to spend? Wouldn’t it be better if we were all able to use the fruits of our labour to boost the economy?

Buy off all the debt and ban credit/store cards completely. We’d survive – people would find it hard at first, but a debt free, frugal society would cut down on greed and unecessary waste.

The government could buy the debt of all individuals and allow us to pay back what we owe at a much reduced interest rate within a reasonable timescale – outside of 5 years. All the money (&more) would then be paid back meaning the government was not out of pocket.

Alternatively the banks could be forced to offer very low rate loans (linked to base rate) but fixed to allow people to budget in exchange for us surrendering the plastic and ensure there is no way, at least until an individual has cleared their debt and built back their credit rating, that they have access to any type of consumer spending and any mortgage or business loans are very stringently managed. The banks would still receive their money and people would be able to rebuild their lives much quicker, leading to a society free of debt and money worries – a more productive workforce, without high rates of sickness caused by or inflated by stress or depression.

Finally the banks could be forced to address the situation and:

Allocate payments in the most appropriate way (highest or oldest debt to be paid first)
Cap the level of interest rate allowed or link to base rate so all lenders offer a similar product and their pricing is fair and transparent (should a customer be struggling with the debt withdraw credit and agree a reasonable to allow the customer to repay the debt without the added problems of rate-jacking or unsolicited charges being applied to the accounts. The repayments should take the form of a loan, rather than a credit card agreement).
Install a minimum payment of 5% for all new debt, not retrospectively. Doing this would only send more customers over the edge. We are generally paying all we can now – asking for more would be unproductive and wrong. However if new customers (or existing customers taking out new lending) understood that they needed to pay more per month they could budget for that, and spend accordingly.
Credit limits should be very closely monitored – if a customer is able to pay they should be able to raise their limit easily – their statement might note that as their payments reflect an ability to pay the bank are willing to offer more credit. If the customer wants to extend the limit on the account they must contact the provider and qualify for the raise by providing the proof they are able to meet their commitments. If the bank was doing its job right there would be no need to raise interest rates to cover the risk of bad debts – bad debt should be minimal – and as they have happily supplied credit on those grounds they should be responsible if the customer is unable to pay. What would society be like if everyone who made a wrong financial decision was suddenly able to demand others for money to cover their losses? If a customer, who the bank have seen as a good risk and been happy to lend money to defaults for any reason, why should they be able to raise the interst rates of customers who have never put a foot wrong (or hardly out of place)? Surely their profits should take a hit – let them be accoutable – that way they would learn. We all learn from our mistakes, I know I have. But if the government continue to bail them out and are also happy to stand by while they destroy the lives of innocent hard working citizens when will they ever learn?
All literature and agreements should be in plain english – the interest rates should be easy for layfolk to understand – we are all guilty of not reading small print from time to time – ensure they don’t hide any nasty little secrets in there. All information should be clear, transparent and understandable.
Although agreements state the interest rate is variable how can an overall increase from 6.9% to 34.9% be allowed? The banks should not be allowed to increase the rate significantly – if they do a tight budget can be blown out of the water. We are living week to week and might nothing to spare. Without extending borrowing in some way how can we find the extra. We’ve already cut down on everything else. There are no more savings to be made in many household budgets.
Stop banks charging more for cash withdrawals over purchases – other than robbing us blind is there any reason for this?

Come on Great Britain – you bailed the banks out now its the people’s turn – we’re suffering too!!! Labour should look after its loyal but wavering voters. Making a strong decision now would win you so much respect among the ordinary voters – help us in our hour of need and our gratitude will repay you tenfold, and return Gordon Brown to office. Fail us and my generation of working class people will desert you – probably forever – we will never recover from this.

Thank you for taking the time to read my thoughts on this matter – I could go on all night with the ideas I have, so much seems like common sense – the bottom line, though, is – the banks are unable to self regulate – they are too greedy and do not have the public’s interest at heart. They will happily take, take, take without giving anything back. Please make a stand – don’t ignore our plea – look after the general public and let the banks look after themselves.

Yes there need to be more restrictions on the available credit and the minimum repayment required but any upward movement should be on new credit cards accounts where people know what the terms and the costs will be. If this were imposed on all current credit card accounts it would be disastrous for many struggling families. It would lead to regular additional monthly charges for people who were unable to make the minimum repayment and push them deeper and deeper into debt.

Yes, there should be restrictions on increases in credit limits but it should only be a restriction on this practice being carried out without consultation with the customer. If the customer were invited to increase their limit and was required to take action to arrange the increase, in many, if not most cases they would simply take no action.

The different interest rates for different types of transactions, and what counts as those transactions, is confusing and needs better clarity and explanation.

Sudden increases in interest rates, as and when the credit card company feels like it, are unfair if a customer has a perfectly good repayment record with that credit card company. So long as repayments are made on time as required it is totally unreasonable that because of changes in the credit card holders credit report and actions elesewhere, the credit card company can just increase the interest rate as and when they please and without any sort of proper explanation or justification.

Interest rates need to be capped. It is ludicrous that when the bank rate is at 0.5% credit cards are frequently charging 25% per year. Fifty times the bank rate is extortionate and could well encourage people to use illegal money lenders because they are much cheaper.
There should be a limit of perhaps 10 times the bank rate though if the bank rate were ever to rise to 10% again we would be paying 100% interest on credit cards. This would still be considerably better than the 500% we would be paying now if we had a 10% Bank Rate and the credit card companies calculated interest rates as the do now.

Credit cards are a very useful financial tool for short term debt but very bad when used for long term debt. A legal right of conversion of credit card debt into fixed term loans would be a great help to many consumers who has mistakenly used their credit cards for long term debts and suffered severe financial difficulties as a result.
The current situation simply pushes the debtor deeper and deeper into debt as they find they cannot afford the repayments and suffer additional charges and fees which increase the debt every month.
It is not in the interests of the credit card company or the debtor if the debts are eventually sold on, for pennies in the pound, to debt collection agencies when an arrangement could be negotiated whereby the debtor could repay the loan over a fixed period of time and everybody benefits.

The credit card industry does need to be more regulated to prevent abuse but any regulation introduced should not cause even greater hardship for those people struggling to repay their debts. Most people want to repay their debts but additional charges and increased interest rates make it more difficult. Increasing the minimum repayment would be the final nail in the financial coffin of many people and if this is to be introduced, it would be a good thing in principle, but should only apply to new credit card accounts otherwise it would harming those people who most needed help and support to overcome their debt problems.

2. Low minimum payments are a double edged sword. The old standard of 5% would be better reintroduced but so many are so deep in debt that it might cause a wave of personal bankruptcies. Act with caution is my view.

3. Increasing credit limits without agreement should be banned.

4. Raising interest rates without explanation should be banned as should any rate greater than 10% more than base rate. There is absolutely no justification for APR’s as high as 35% with base rates of 0.5%. Risk is handsomely rewarded at a 10% coupon. Current rates are usury.

5. Confusing advice. Any kind of reliable advice from credit card companies would be nice. Don’t hold your breath, they have a vested interest in confusion. Advice should be plain English and best practice, not best for the lender.

6. Lots of different cards are not a problem. Byzantine terms and conditions in small print that rivals War and Peace in length is a problem. It’s time for a simplification of contracts and a requirement to provide bullet point headline facts relevant to the consumer.

incresing minimum payment levels will be a financial disaster for a large portion of the population and will push many to bankrupcy who are managing now.

Reading the comments, it seems people with debts are focusing on the mandatory monthly repayment, which is no surprise and they’re right – increasing the amount people have to pay when they are already over-committed is problematic (although the credit card companies do it all the time of course, so I think people are being a bit disingenuous here). There are ways it could be done though – capping/reducing interest rates in tandem with increasing the minimum balance repayment would not have the adverse effects people fear, but would actually benefit people, especially those on low incomes, by reducing and clearing their debts much faster without increasing the amount of their repayments.

Tackling existing debt is important and getting those debts cleared faster is key to sorting out the mess. I cannot imagine a better time for government to step in, given that interest rates are generally so low. Of course the card companies will complain and people should be responsible for their debts. But the card companies also bear a heavy responsibility for their reckless marketing and reckless lending policies – it’s time they were called to account.

Existing debt needs to be reduced and future borrowing needs to be far more firmly controlled. It should be far more difficult than it is to rack up huge debts and then become trapped in endless interest payments on a debt that barely reduces at all year on year. There is no control on people’s overall level of borrowing – and there needs to be. I say this even though I know that it will probably make life harder for me personally (we need a stupidly-high credit limit, because of my husband’s job, although we pay off every month).

Ordinarily, people should not be able to obtain credit in the form of bank loans/credit cards/etc that exceeds a specified percentage of their annual income. Currently, there is no limit at all other than limits set by lenders individually, and we see the results. There needs to be a system that prevents people obtaining multiple loans and multiple cards producing extraordinary levels of personal debt that are completely unrelated to income.

The tricky part will be framing this in a way that preserves some necessary flexibility without rendering the legislation useless by opening huge loop-holes.

In election year it is doubtful that much will get doe in any event, but it also seems that people are generally agreed that the allocation of repayments to the lowest interest rate is unfair. It wouldn’t be reinventing the wheel to force companies to change their systems so that debt is paid off in the order it is incurred.

The final point I have to make is that while there is a ‘free market’ government is never going to legislate on APRs. However there must be some way of allowing a customer to resist random increases in APRs which occur without justification and seem little short of legalised robbery. The agreement that the government forced (and indeed they did force it!) through a year or so ago in relation to people being able to lock in an old rate if they terminate the agreement following an APR increase is good so far as it goes. But in reality that disenfranchises those people who need a credit card for whatever reason, and I would imagine that quite a few have swallowed large increases in APRs just to ensure that they retain the ability to borrow.

It’s a sad situation, and one, like the economy overall, that won’t be solved overnight. There are too many vested interests. Let’s hope that the winner is fairness above all.

Credit cards should be about flexible short term lending and not entrapment of customers in long term expensive borrowing.

The level of cross subsidy for full payers and those who ’stooze’ and game the introductory offers must be stopped. Incentives should be limited.

Minimum payments should be set so that the balance is cleared in less than 5 years.

Payment hierarchies should work so that what is put on the card is cleared in the order it was spent.

A maximum APR of 20% should be set with credit risk managed through credit limts.

The industry seems to have completely forgotten what social purpose it serves – allowing people to spread the cost of purchases flexibly over a reasonable period of time. Instead it seems to be about debt entrapment, maximising fee and interest income and rather than enabling people to purchase things they need, ensuring the highest possible percentage of their disposable income goes on servicing debt without tipping them over the edge.

It has to stop. As a way out, I would suggest a debt reset for anyone with credit card debt greater than 33% of their gross salary so the debt is converted to a repayment loan over 5 years at around 10% APR.

New cards should have very low introductory deals, reasonable APRs and credit limits and maybe then the industry can compete around customer service and not getting people into too much debt rather than exceptional returns on capital in the good times and keeping the insolvency service busy in the bad times.

The most likely immediate consequence would be that many people who are currently managing to repay their debt (albeit slowly) would be forced down the debt management or IVA route. This cannot be to the benefit of those individuals, the card companies, or the country as a whole.

Credit card statements should make clear the projected timescale over which the debt would be cleared if only the minimum payment was made, together with a recommended (but not manadatory) payment to allow the debt to be cleared within a specified timescale. The customer would then have the information to hand to help them to manage their payments according to their particular circumstances.

If the Govt is keen on imposing say 5% min. payment then perhaps it could be introduced in a phased way. So in say 12-24 months time (perhaps calculated on how much credit people have taken out vs ability to pay), any new credit taken is made so on the basis that it must be paid back at the new national min. payment level of say 5%, up to then it will be on the original contracted rate. This will give people time to adjust. I notice though that personal loans are only marginally better APRs than a lot of credit cards. The BoE rate is meaningless in the current market, where credit orgs are just interested in risk and margin.

I also think that people should have the option to allow extended credit limits or not. The default position on contract start is ‘no’. I also believe that people should have much greater freedom to close accounts on any new credit card use, to allow people to focus on paying off their cards without knowing that it is still ‘active’ and therefore tempted to get back into a vicious circle.

At the end of the day credit cards are performing a service for millions of people. It is time the credit card companies took greater responsibility themselves and therefore it might be interesting to understand which cards score high on ‘ethical financial lending’ – they have a proven track record for helping customers before they get into financial difficultly – proactive rather than reactive.

Perhaps scoring credit card companies for responsible lending on a national register rather than private companies who are often reliant on advertising revenue. How about an OfCred – regulator for credit services? I thinking the banking ombudsman needs kicking out to have allowed this to go on for so long?
Suggested ratings:
5* – Don’t keep varing rates, go above and beyond current legilsation
4* – Very proactive in supporting customers
through to
1* – Track record of high number of customer compliants
Name and Shame!

ALL of the CHANGES proposed to CREDIT CARD REGULATION simply DO NOT CUT THE ICE, with OBSCENE INTEREST RATES at more than say 10% – ditto ALL BANK LOANS, where the Bank of England Rate is 0.5%.

People are often greedy too, hence that is why they have large UNSECURED Credit Card or Bank or even worse unregistered LOAN SHARK debt!!!!

Unregistered LOAN SHARKS should be prosecuted and imprisoned and not permitted either internet or Mobile Phone access whilst imprisoned, to stop their tricks and their trade being perpetuated.

Where Credit Card Debt is clearly LONG TERM, with valiant efforts made to repay monthly for more than say 1 year, with NO PERSONAL INCREASE in that debt, Credit Card Issuers should be COMPELLED to OFFER to transfer the Debt to a SENSIBLE INTEREST-RATE unsecured LOAN, at say no more than the Court Interest Rate, exorbitant even that I find that at say 8%, with consequent Interest Rate Increases, when the Bank of England Rate rises and CONSEQUENT REDUCTIONS, when the Bank of England Rate falls too.

ALL that the proposed New Regulations will do, is cause the Banking Institutions to do, is 1. Raise Interest Rates and Charges further to the poorest sections amongst us, currently enmeshed in these debts and 2. Stop offering Credit Cards at all to the poorest amongst us and 3. Reduce available credit to the poorest, which might be no bad thing – to have to wait till one can afford to pay with ready cash for whatever item it is that is so expensive and so believed or perceived to be required.

IT IS JUST TOO BAD AND UNFORGIVEABLE that recent Governments have failed to rein back the I WANT NOW – AND CAN HAVE NOW, PAY LATER, myth, regardless of whether “I” has the money or means to pay or not.

Furthermore, Banking and ALL Financial Institutions – including the PROVIDENT and PAY DAY type LOANS Companies (and all the clearly very short-sighted RATING COMPANIES – EXPERIAN and the like – who failed to see the current/recent CREDIT CRISIS AND CRASH) should ALL BE REQUIRED to have FULLY EXAMINED the means of prospective Debtors, AS TO WHETHER OR NOT A LOAN OR CREDIT IS AFFORDABLE OR NOT.

YES BACK TO THE OLD DAYS which would STOP the OBSCENE PROFITS and OBSCENE BONUSES and OBSCENE PENSIONS at a stroke – Currently EARNED IN THE Banking World for persuading hard-pressed individuals to take on Credit, they CAN NEITHER AFFORD, nor in ALL SENSE ACTUALLY NEED!!!!!

Peter Mandelson take note too – there is nothing wrong with profit FAIRLY EARNED by a HARD DAY’S WORK. There is everything wrong with OBSCENE PROFIT UNFAIRLY EARNED!!!!

PROPERLY REGULATE THE GREEDY BANKS, FINANCIALS and BANKERS –

Even though this means the Public Debt will take longer to be repaid and the Publicly Owned Shares longer to sell off!!!! There are NO quick fixes and having already stripped bare poor old Joe and Jean Public to keep those Banks in business – do not go on to continue this rape and pillage of the British Taxpayers!!!!

BE BRAVE GO ON DO IT – REGULATE THE FINANCIALS and BANKS who have so richly provided the TAX INCOMES to Governments since the Thatcher’ 1980s days!!!

AND MAKE SURE THAT TAXES ARE FULLY PAID BY BANKERS AND FINANCIALS – ON ALL MONIES PASSING THROUGH THE UK and not passed out to some little Swiss or other off-shore Accounts or some other alleged nice little non-dom scheme to AVOID TAXATION!!!!

TAX EVERYTHING HERE IN GB!!!!!!

Thank you.

The rules need to be changed to make it easier to pay off debts, and make it illegal for a special deal to be cancelled by just missing one payment: there should be a proper appeals proces enshrined in law: some companies already do this, but it is not well known.

Also, stop automatic credit limit increasing as that’s self-defeating and only serves the profits of the credit card companies.

Please take note that most of the voting public have suggested that the allocation of debt on credit cards (i.e highest interest earning debts paid off last) is against moral and financial obligations in going forward in this new decade.

Please address this, but heed our warnings that if the minimum payment threshold is increased it WILL have a negative (or devestating) affect on thousands of hard working families trying to get by!!!!!!!

increasing the minimum would cause me to default for this reason.
with more then 1 card at different apr’s I am putting all my spare money into paying the more expensive while paying minimum on the other.
raising both minimums would actually be far worse for me as would pay more on both regardless of if I have any spare money. so if a bad month comes along where at the moment I might pay minimum on both I wouldnt be able to afford it as it would be a huge jump on my existing deal all of a sudden if the rules were changed.

Also in the past when credit card companies, upped my credit limit and bombarded me with cheap deals to use the card, by text and mail, as well as unnanouced cheques appearing in the post, then they started upping my apr a few months later. thats a shifty practice in my view.

They are charged market rates which are okay for most people, but not for those on low fixed incomes.

Perhaps the credit card companies could introduce a “social tariff” similar to the energy companies, together with more realistic credit limits based on income.

The result of this would be (amongst others):

* people would regain control of their finances
* less defaults
* less loan sharks
* less depression/suicide due to not seeing a way out of debt
* possibly less shoplifting by those who can’t afford to legitimately buy Xmas presents resulting in less people in prison

It would be a win-win situation all round.

An example will illustrate what I mean:

Credit Card A is advertised at 11% typical APR.

The consumer applies for the card and is approved, but at 20% APR.

The consumer now cannot readily apply for another card to try and obtain a better ‘offer’ (e.g. a better APR) because the original Credit Card Company to which they applied will have marked their Credit Report with an official search – and so subsequent searches will reveal this (and multiple searches count negatively in credit scoring, so future applications for Credit Cards are likely to result in an even HIGHER APR being provided).

Taken this all into account, it means that consumers are not free to shop around competitively for a good credit card that suits their needs and instead they often have to take what they are offered, because ‘typical APR’ is not a meaningful term.

It would be more effective if the ‘credit footprint’ – that is, the search recorded on an applicant’s credit file – remained on file online if the applicant then accepted the Credit Card. Otherwise, it could drop off after 7/14 days and give the consumer to chance to shop around for a better deal without being disadvantaged.

Or, to put this into a very simple analogy:

If you went into a shop and asked how much an item of clothing was, you would be pretty annoyed if you went into a different shop to find out how much the same item was, only to be told it costs twice as much just because you had looked in the shop next door first.

Any additional advice is welcome – and in particular providers should be required to show both current monthly interest rates applicable, as well as the AER – both together – to aid comparison.

What concerns me deeply is the proposal to enforce an increased minimum payment level, or highlight any lack of paying more by creating a two-tier minimum payment system. The majority of credit card users take great care to adjust their expenditure and payments to such a level that they can pay them. But to move the goalposts and to suddenly increase what has to be paid would in my view be catastrophic for both credit card users and the country.

Perhaps a higher minimum payment could be applied to new cards taken out after a set date, but the strategy relating to existing cards would need to be managed extremely sensitively and carefully. Any measures to increase the required minimum payment on existing credit cards should incorporate at least a 12-month advance preparation period, and then be phased over perhaps a 5-year period to ensure that consumers can adjust to the changes.

To act precipitately an issue such as this would create major problems for a large proportion of the electorate, and for the government at a time when it is particularly need of voters’ support.

2) Repayments should be allocated in date order

2) Interest rates should be linked to base rate

3) Sometimes good deals are offered on balance transfers, so credit card cheques should not be stopped.

Credit Card companies make a killing from setting the minimum payment low and interest high. i dont see any other way of reducing credit card debt other than increasing monthly payments and reducing interest rates.

I earn £35,000 per year but because of continuous calls on money from tax, utilities, mortgage, CSA payments etc. no one can afford to live an ordinary life in Britain without using credit cards.

If the CSA was to calculate what I could live on it would be around £60 per week. Try and buy clothes for work, haircuts, travel, a beer every now and again without needing credit……….

I think all outstanding debt should recieve a 0% interest until paid off. No one should be able to obtain any further debt which was greater than 24months of a normal monthly payment based on the previous 6 months.

This would start to bring peoples use of credit in line with salaries etc. Or at least prove to the government that no one can afford to live in Britain.

BIS Credit and Store Card Consultation team

Having read many of the comments on this site is clear that a lot of people have issues with Credit card companies regardless of their own financial boyancy. I have infact paid off most of my credit cards and I am rapidly whittling down the balance on the remaining one. To ask for an end to dirty tricks and a clear strong legislative policy re Credit Cards and store cards is wise not whining, also let’s remember 18 year olds can get credit and many at this age have little understanding of financial management.

Also, the minimum payment should be set against the highest balance attained and kept at that level, you would pay off a damn site quicker re-2or 3yrs instead of 26 to 40 yrs.

Why have card interest rates risen when the base rate is so low.

Dick Turpin wore a mask

credit card companys should not be permitted to increase interest rates on existing balances, borrowers borrow on the basis of currently advertised rates and could get into difficulties, certainly any increase should be no more than inflation, at the moment the gap between saving rates and card rates is unjustifiable.

In my opinion there is too much interference in the freedom of the individual to make their own choice.
We all know it will take longer to pay off the the said debt if we make a minium payment.I think this is being proposed, so that the banks can rake
in funds more quickly, nothing to do with helping the individual out!!!

To add further injury the only number on the letter they provided me to call them on was a premium rate number as if they aren’t making enough money charging me interest rates of between 19.9% and 28.8%. When I took the card out years ago I think it was 9%. I don’t recall ever being notified of the rises. I have never missed a payment or even been late in all the years I have been a customer and I do not like being treated like this.

Why are credit card interest rates so high when savings and bank rates are so very, very low? If people are struggling, as is quite likely given the state of the economy, then putting up interest rates is simply pushing people further into debt and increasing the likelihood of default.

I am not concerned about the reduction in the limit, although it is an inconvenience and I gather I’m lucky they haven’t reduced it BELOW the amount on my card, but there should be a rule that they have to tell you BEFORE they start charging you for going over a limit you didn’t know had dropped. At least 30 days before.

Generally credit card companies have started treating people appallingly this last year and of course they know they can as there is no watchdog body you can go to any more to complain about them so they can do what they like. And they are.

I also wish they would stop sending cheques with ridiculous APRs attached to them. Mind you those new Pawn / Money shops charge 200% so there are a lot worse.

This to me makes it very clear to people that there is a cost to credit at the point of use, plus makes the credit card companies take a more active part in the repayment programme.

And yes I have creit cards and they have up’ed the limit in the past without asking. I don’t think that is responsible without giving the people the chance to review their individual repayment programme.

I think credit card interest rates are too high – when I had a credit card in the 1970s with inflation really high the interest rates were no higher than they are no when inflation and the bank of england’s interest rate are really low.

There should be regulation to put a ceiling on how much interest credit card companies can charge.

There also needs to be an industry standard about how interest is applied to a credit card – I have found some cards are paid off more easily than others even though they have the same monthly rate because of how the company applies interest to the debt.

There needs to be better information sharing between companies to avoid people racking up a fistful of credit cards. I managed to get five cards with credit limits of over 10k pounds each on an income of 25k. I know I am to blame for the situation I got into but the idea that credit card companies are responsible lenders is ridiculous, in my experience.

What is a credit card for – should people on modest incomes really be allowed to have credit limits of half their annual income? I would say not. Can the government not legislate for a person’s total credit limit to be no more than 2 months income, so they can be paid off relatively easily?

It would be in government’s hands to set up a system where people were simply not allowed to get fistfulls of credit cards each with credit limits in the ten thousands

- Interest rates should be linked to bank base rate, e.g. no more than 10% as suggested so cards can’t suddenly increase them on a whim.

- Interest should only be charged on proportion of balance owing, not full balance for full balance period even if you’ve paid most of it off.

- Credit limit should not be allowed to be increased without cardholder’s permission.

- Statement should clearly state when special rates are due to finish.

1. Different interest rates

I prefer Option 4. Balance transfers encourage people to borrow more than they can afford to repay and if they disappear or become less common this would actually be a good thing. Second choice is option 5.

2. Minimum payments.

I agree with the comments here. More explanation will not help – people don’t read bumph so it’s pointless. A short, large, bold print indication of how long it will take to pay off the debt with minimum payments should be mandatory. Minimum payments should also probably be increased so people can’t borrow large sums with tiny repayments.

3. Credit limit increases

The limit should only be increased if people ask for it. It’s too tempting to accept extra credit if offered, no matter the mechanism. But what really needs to happen is that people should have an overall credit limit, based on income, *** across all their cards, store and credit ***. It’s too easy to have a dozen different cards and without an overall control on what people can borrow – limits on individual cards mean very little.

4. Interest Changes

Option 5/6 should be a no-brainer. Credit card companies should not be able to increase interest on an existing debt unless it’s a general increase *linked to an increase in base rate*. They should also be obliged to reduce interest on the same basis. If a customer’s circumstances change so that they are a poorer risk, new borrowing should be able to attract an increased rate, but the account should be frozen and the client should need to apply for a new agreement so that there is no danger of the information being ignored.

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With regard to general information and choosing cards, yes it should be possible to improve communication. But only if it’s kept simple (the eco-labelling for electrical appliances comes to mind). People are simply not going to read yards of bumph.

Overall though, people need to borrow only what they can afford and I see very little here to achieve that. A huge amount of credit information is already collected & used by lenders to evaluate credit-worthiness. It would be a simple matter to record credit limits/existing borrowings so that a consumer’s total level of borrowing is recorded. It should be illegal for companies to knowingly lend more than a customer is deemed to be able to afford – currently, there’s nothing to stop me opening dozens of credit card/store card accounts and taking loans for house/car/furniture/white goods purchases because no-one takes into account my existing commitments. This has to be addressed, because preventing people from getting into financial problems in the first place is much healthier than trying to help them once they’re in a mess.

The heart of this whole issue unfortunately is a lack of ability to budget from many or a lack or forsight to save. Good budgeting skills should be taught from as early an age as possible. I’m always puzzled by those who don’t know its a good idea to save 6 months salary or say they can’t afford to then promptly head of to the pub, save £5 a month, or £10, or £20, it all adds up eventually. The want, want, want attitude had gotten many into unmanagable debts, it is possible to live without expensive TVs and digital packages, gadgets, posh cars, if someone feels the need for these things and gets into massive debt they only have themselves to blame. Until this spend, spend, spend culture changes the Government are up against it.

Interest rate rises should apply only to new borrowing (except of course when a special offer rate ends).

The monthly statement should show how long any special low rate still has to run.

I see no justification for charging higher interest on cash advances; the fee replaces the commission which would be earned in a normal purchase transaction.

Advertised balance transfer fees should be accompanied by a statement of the equivalent AER (a 3% fee on a six-month 0% transfer is equivalent to 10.7% AER – a substantial profit for the lender, and far from interest-free!).

A statement of the estimated time to pay off a debt at the minimum rate should appear on each statement, together with the amount of interest which would be paid and further estimates for increments of (say) £10 or £20 per month.

Sending of unsolicited Credit Card cheques should be banned. Mine get shredded as soon as they arrive..

Credit limit should only be increased it you ask for it to be. Continuously increasing your limit encourages debt. It also affects your credit rating as even if you don’t use the credit, it’s available to you.

Other unfair practices:

Interest Rates increased with no explanation except “It’s a variable rate card” with the Option accept increase or close account.

Interest charged on whole of statement balance if amount due is not cleared in full.
Takes no account of the amount paid. 1 penny underpaid means you pay interest on the lot for the whole statement period..

Interest charged on whole of statement balance for the whole statement period, if payment a day late.

Repayments must pay off the highest % rates first not the lowest rates as is the current situation. Government owned banks e.g Northern Rock should offer consolidation loans with cheaper rates to those with a record of two or three years of meeting all payments on the proviso that customers sign onto a no-credit card register until the debts is cleared.

Finally think about all the people out there who are trying to pay their credit cards off, please don’t push them down the bankruptcy route etc………………how can this be good for the economy.

It is unfair to change the rules now on those who have already got themselves into a difficult situation.

An 8.5% minumum repayment of all new debt would effectively make the credit card equivalent to a one year loan. It is much easier to get credit card debt than a loan, so at least if the minmum repaymnet was clearly going to resemle that of a loan, people would not see credit card debt mistakenly as easy debt.

More Credit Unions are needed for those people who are struggling with debt or find it difficult to get a loan. Sometimes these people see the rip-off storecards as their only option-so help them with others.

- the highest interest items should be paid off first
- increasing the minimum payments would cause many existing credit card customers huge problems so could this be brought in for new customers?
- unsolicited credit limit increases should not be allowed, these should be on request only
- there should always be a full, clear explanation of any interest rate increases
- the idea of a simple credit card could be a good idea if developed in the right way

The issue of debt is much wider than this, however, and credit card companies are only a part of it…

- there should be more funding for independent debt advice services, like the Citizen’s Advice Bureau
- there should be better regulation of companies (in general) offering loans with extortionate interest rates – tempting people with low monthly payments, which people will be repaying forever
- there should be better education in schools to equip people better for real life finance

It is always the most vulnerable people who get a raw deal in terms of interest rates and are therefore forced into unmanageable financial situations through desperation – this shouldn’t be allowed to happen.

Raising the minimum monthly payment for existing credit card holders, would bankrupt some people. So perhaps the common sense solution would be give current customers the option to transfer, and all new customers mandatory. Also the idea of an intermediate payment solution is good, although this can be done already via the phone, bank or internet, but is manual.

I would also suggest for new customers, a credit limit proportional to their salary, but less than by a reasonable amount, as my limits are close to or even over my gross salary, not good!

When bank of England rates are going down ban the companies from putting theirs up! I have a couple of cards whose interest rates have gone disproportionally up rather than down!

An annual breakdown of your card debt and repayments would be good as it would highlight to those of us that are less savvy with money, what we are doing with our money. Also a indication on the monthly bill of how long it will take to pay off at the current rate of repayment.

I never at any time refused to acknowledge that I owed them their due amounts but asked instead to be given a little time to sort out my financial circumstances.

I never ever received any help from them and their solution to the problem was to keep adding further amounts of interest. I requested that they referred my debt to a debt recovery company and stopped applying more interest. they refused to comply with my requests and even when I asked them to take me to court but even this they refused to do but instead just kept applying more and more interest.

I have now been un-employed for nearly a year and at last the credit card companies have passed over all my debts to a debt recovery agency and I have agreed a sensible re-payment scheme. It transpires that these agencies buy the debt at a reduced rate from the credit card companies and then charge me the full amount.

Why could these credit card companies not stop all interest charges when I explained my situation to them and agreed a sensible re-payment scheme, they would have been better off and so would I.

Thank you for your interest in this wholly unfair part of the finance industry.