Government set to launch review of consumer credit facilities
The UK government, via the Department for Business, Innovation and Skills, will undergo a major review of consumer credit facilities in the UK over the next few months. There is concern that many consumers in the UK have been locked into credit card and other credit arrangements due to the amount of capital debt they have built up and the relatively high interest rates charged by credit providers. So what is the UK government looking to do?
A number of potential recommendations have already been discussed such as a seven-day cooling off period for store cards and credit cards but one issue which will be welcomed across the board is a potential cap on credit card and store card interest rates. While there is no doubt this would help those suffering from debt issues, and also avoid as many problems in the future, is it really fair to limit interest rates in a free market?
It is likely the government could attempt to cap interest rates via some form of comparative test against base rates and money markets to see whether the rates being charged are fair. However, there is no simple solution to this issue and whatever the authorities decide there will be pros and cons.
Share this..
Related stories
Government Launches Funding for Lending Scheme
A new scheme known as Funding for Lending, which is set to encourage banks to lend more to small businesses and individuals, is being launched today, with the hope that it will help turn around the recession. The scheme will see the Bank of England make more money available to financial institutions at below market rates, which they can in turn pass on to consumers. All progress of the money th...
Read MoreDo consolidation loans work?
As the slowdown in the UK continues to gather pace we will shortly be seeing more and more people looking to refinance their debts in order to keep their heads above water. While up until now the banks have been a little reticent to authorise such moves on a grand scale we should start to see some movement as the money markets start to return to something like normality after the credit freeze....
Read MoreDo consolidation loans actually work?
As more and more people in the UK continue to struggle with their monthly budgets a number are now starting to look at consolidation loans as a means of taking away some of the short-term pressure. But do consolidation loans actually work? The idea behind a consolidation loan is that all of your debts are rolled up into one single loan arrangement which will be extended over a longer period the...
Read MorePPI crackdown indicated by FSA
The Financial Services Authority (FSA) is to crack down on the Payment Protection Insurance (PPI), new comments from the regulator suggest.According to the body, it will be "escalating" its interventions in the sector - which has been dogged by claims that the cover is mis-sold and does not offer good value for money.PPI works by helping to cover loan repayments of policyholders who suffer sudden...
Read MoreWhat is your overdraft interest rate?
While the vast majority of people in the UK will have some form of overdraft facility how many are aware of the interest rate currently being charged on any outstanding balances? A report today confirms that the average rate charged by banks and building sites in the UK during the month of August was a phenomenal 19.1% which is the highest figure since records began in 1995. As more and more pe...
Read More