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The UK Cards Association calls for government to take action

May 2010

The UK Cards Association wants action by government to help put customers in greater control of their finances and card payments:

  • Revise the way in which credit card APRs are calculated to ensure that they are meaningful for customers
  • Ensure that ambiguous points of law that are being exploited by Claims Management Companies (CMCs) to customers’ disadvantage are clarified and that the regulation of CMCs is robust
  • Take action so that merchants do not profit excessively from surcharges for paying by plastic card
  • Simplify consumer credit law so that the information that lenders are required to provide to customers is meaningful and easy to understand

Key Facts and Figures

  • 43 million UK adults hold a debit card and 30 million a credit card
  • The average cardholder has 1.8 debit cards and 1.9 credit cards
  • 950,000 UK merchants accept plastic cards at more than 1.2 million terminals and are increasingly reliant upon cards as consumers’ preferred way to pay
  • The amount of personal spending on debit cards will overtake the amount of personal spending in cash during 2010
  • More than 60% of credit card holders pay-off their balance in full each month
  • The amount owed on credit cards is falling and is now £54.5 billion (down from a peak of £59.0 billion in 2005) now accounting for just 3.7% of all lending to individuals
  • As of February 2010 the average credit card APR was 16.5%, having fallen from 23% in 1995 and reaching an all-time low of 14.7% in 2008

By the end of the year the industry will have implemented changes that will ensure:

  • that the highest interest debt is paid off first; and
  • that customers will be given improved notification if their credit limit or interest rate changes, including the ability to opt out of a price increase and pay down the existing debt at the existing rate.

For more information contact The UK Cards Association at support@ukcards.org.uk

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