Credit card industry commissioning evidence on consumer impact of Government proposed changes
· UK’s 30 million credit cardholders facing less choice and higher cost under Government proposals
· The UK Cards Association responds to BIS’ consultation
The UK Cards Association (formerly part of APACS) which represents the UK credit card industry has today (27th October 2009) issued an initial response to the publication of BIS* consultation on credit and store cards.
It is essential that the case for change is supported by robust evidence. The industry has commissioned a programme of comprehensive research to demonstrate the impact of the government’s proposals on consumer choice and the cost of credit cards to consumers. The industry will publish its evidence by the end of the year.
The credit card industry remains entirely committed to the process of review and making changes if and when they can be shown to be in the best interests of credit cardholders. It has been actively engaged with BIS throughout the year since presenting proposals to assist hard-pressed consumers following the Credit Card Summit held last November.
Melanie Johnson, recently appointed Chair of The UK Cards Association, comments:
“The industry wants to get things right for its customers. Now is not the time for us to talk about the detail but to marshal the evidence needed to respond to the government’s proposals. We need to be able to demonstrate what impact these would have on consumer choice and the costs to customers of using credit cards.
“We have seen customers respond to the credit crunch by using their credit cards differently than was the case five years ago. Credit card debt reached a five year low in 2008 and is still decreasing; 60% of credit card users are paying their credit card bills in full every month. And APRs remain lower now than in the past. These are important changes to the credit landscape and it’s important we maintain the flow of credit to customers who want to have the flexibility and ease of use that credit cards offer.
“Before we tell government of our concerns that these new proposals could lead to some customers having a lot less choice and to extra costs for many of them, we will be reviewing the evidence and we expect the government to do the same. These proposals risk disadvantaging more customers than they protect.”
The industry remains entirely committed to lending responsibly; to being transparent; and to helping its customers take responsible borrowing decisions. Should a customer get into financial difficulty they can expect to being treated sympathetically and fairly.
ENDS
For further information contact The UK Cards Association Press Office on 020 7711 6340 or press@ukpayments.org.uk.
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Notes to editors:
1. The UK Cards Association is the leading trade association for the cards industry in the UK. With a membership that includes all major credit, debit and charge card issuers, and card acquiring banks, the role of the Association is both to unify and represent the UK card payments industry. It is responsible for formulating and implementing policy on non-competitive aspects of card payments including codes of practice, card fraud prevention, major infrastructural changes, development of standards and other matters where cross-industry benefits are identified. The UK Cards Association was formed in April 2009 as the successor body to the APACS Card Payments Group. 2. This consultation paper fulfils and expands upon a commitment made by the Government to consult on credit card issues contained in its White Paper published on 2 July 2009 entitled “A Better Deal for Consumers: Delivering Real Help Now and Change for the Future”. The consultation looks at four main issues: · Unsolicited credit limit increases · Allocation of payments · Minimum repayments · Lenders’ ability to alter interest rates 3. Change is afoot. APACS was the umbrella name for the co-operative activity of banks, building societies and card issuers on payments and payment systems since the mid-80s, but the industry has recently moved away from the use of the name APACS in favour of names that better describe the various parts of the payments industry, such as the Payments Council, The UK Cards Association and the different clearing companies. Please rest assured that the press team, what we do and the issues we can talk about remain the same as have our phone numbers. |
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