Prime minister to encourage credit card issuers to lend responsibly

13/11/2008

The prime minister plans to hold a meeting with UK credit card issuers in the aim to try and get them to lend more responsibly to UK borrowers. This decision by Gordon Brown came as they aim to keep up the pressure on UK banks with regards to lending too much to small businesses.

Officials commented that, “The government will be calling on the industry to bring forward a statement of best practice about how it will apply fair principles to existing debt.” In order to toughen up the personal baking code of practice that protects borrowers, the Department for Business aims to work with the credit card industry.

According to research on around two-hundred and forty credit cards, interest rates have risen by 0.4% since May this year despite the Bank of England cutting its bank base rate. Though lenders are making some progress in this area, the Department for Business talked about concerns it had and said there were “pockets of bad practice; for example, where lenders increase their rates by 10 per cent overnight.