Latest News

Credit card industry proposes changes to help put consumers firmly in control of their finances

  • Industry to reduce the cost of paying off credit card debt
  • Industry-wide exclusion for vulnerable customers from credit limit increases
  • Lenders to contact habitual minimum repayers to advise them that this is the most expensive way of paying off a debt

The UK Cards Association, which represents the UK credit card industry, has today (19th January) submitted its response to the Department for Business, Innovation & Skills consultation “Review of the Regulation of Credit and Store Cards”.

Please click here for further information and the response report.

The industry’s proposed package offers important enhancements for customers, whilst preserving the interests of the majority who use the UK’s 66 million credit cards responsibly, and enjoy the benefits and protection they provide.

The proposed package includes:

An industry-wide change to alter allocation of payments practices, so that all payments above the minimum payment are allocated to the most expensive debt first (the minimum payment being allocated at the lender’s discretion). This proposal will benefit a quarter of all credit card accounts.

  • A ban on unsolicited credit limit increases for customers facing difficulties. Any other customer offered a credit limit increase will be offered a new 30-day notice period and simple means of ‘opting-out’. 8% of customers were offered a credit limit increase in 2009.
  • Minimum payments – card companies will contact any customer who repeatedly only makes the minimum repayment on their card to make clear that this is the most expensive way of paying off a debt (only an estimated 3.1% pay the minimum for 12 consecutive months).
  • Re-pricing of existing debt – the industry will produce a consumer leaflet to explain the rationale behind the practice known as ‘risk-based re-pricing’, building on work which saw a set of industry principles implemented on 1 January 2009. (Between January and October 2009, 10.6 million accounts were re-priced, with around 40% being re-priced downwards).
  • We will also continue to work with government to identify opportunities to make further transparency improvements and to simplify information for our customers.

Melanie Johnson, Chair of the UK Cards Association says “The credit card industry is keen to give consumers as much control of their finances as possible. The package of changes we are proposing to BIS is based on evidence from a number of highly-regarded independent sources. Our approach will deliver big improvements to customers without smothering competition and choice, which customers value and gain significant benefit from. It will also maintain features which are vital to lenders being able to lend responsibly.”

The UK Cards Association’s response is based on evidence from extensive independent research conducted by Oxera, Argus and GfK, which is also being published. The full document Credit and Store Cards Review: A Response along with a summary is available from

There are 30.2 million credit cardholders in the UK, 60% of whom pay off their bill in full every month. In the past five years there has been a marked shift in the way people use their credit cards. Despite the economic downturn customers are using their credit cards less and credit card debt reached a five year low in 2008 and is still decreasing.


For further information contact The UK Cards Association Press Office on:

020 3217 8251

Notes to editors:

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.

The Department for Business, Innovation and Skills published its consultation paper in October 2009 entitled “A Better Deal for Consumers: Review of the Regulation of Credit and Store Cards: A Consultation”. The consultation looks at four main issues:

  • Unsolicited credit limit increases
  • Allocation of payments
  • Minimum repayments
  • Re-pricing of existing debt

Working with Government and our other key stakeholders over the past few years, the industry has delivered significant improvements to transparency and data sharing. The industry continues to support consultation and remains committed to making change where there is evidence that it will be in the best interests of our customers. The industry remains entirely committed to lending responsibly, to being transparent and to help its customers take responsible borrowing decisions. Should a customer get into financial difficulty, they can be expected to be treated sympathetically and fairly.

19 January 2010

Glossary View Items Highlight Unhighlight
You are here:  Home / News  / Latest news / News 2010 /  Credit card industry proposes changes...
Close Glossary

Glossary of words on this page