Uk Government to announce new proposals for the credit card industry

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The UK government is expected to publish a white paper tomorrow outlining proposed new rules for the credit card industry. The Observer reports one of the proposed rules will outlaw unsolicited credit card cheques in the UK. The report cites that £500 credit card cheque can carry an additional £150 in charges if the repayment is staggered over the course of a year.

The white paper is also said to contain plans to limit the maximum APR's which have continued to increase despite BOE holding base rates at 0.5% for some time. This will help most consumers and hopefully result in more low APR credit cards being available.

This move couldn't come sooner for some consumers that are struggling with credit card debt as interest rates increase. Personal debt levels in the UK are approaching £1.5 trillion, according to charity Credit Action. This equates to around £60,000 per UK household. This move by the UK government follows similar recent actions by the US government.

This move is likely to re-raise the debate on should the government impose limits on APR rates or should it leave it to the free market to determine the interest rates. Take our poll and voice your opinion.