CREDIT CARD PLANS SHOULD CAP INTEREST RATES

CREDIT CARD PLANS SHOULD CAP INTEREST RATES

As the UK Government outlines proposals which would force borrowers to pay
back more of their debt earlier and stop issuers raising credit limit
without consent, the SNP has also called for restrictions on the credit
card market to include a cap on interest rates.

The UK Government is putting forward proposals which would prevent rates
being changed – however Highlands and Islands SNP MSP Dave Thompson, a
former trading standards inspector, is keen to see rates capped, as in
other countries around the world.

Mr Thomson said:

“There is a constant concern over the level of interest some organisations
charge for credit cards.

“This is not just the door to door lenders, but some reputable high street
banks have been caught charges rates up to 30 times higher than the Bank
of England rates.

“Today’s measures are a welcome step but they do not stop banks and
lenders offering credit cards and loans at sky high prices. Other
countries have lower personal lending and fewer problems with debt.

“The system of rate caps works perfectly well in other countries and
should be introduced here.”

SNP Treasury spokesperson Stewart Hosie MP added:

“If we are cleaning up the banking industry then we have to crack down on
credit card lenders as well.

“Personal debt levels in this country are alarming and for too long the
balance has been against consumers. Of course individuals have a
responsibility to manage their finances, but very often card companies
impose confusing and complex conditions, and we need to put customers back
in the driving seat. Introducing a cap on interest rates would be a common
sense move that would go a long way in helping people manage their
finances and get out of debt.”