Changes to credit cards proposed to help consumers

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Changes to credit cards proposed to help consumers

Proposals to change the way credit cards work have been suggested in order to make the process easier for consumers.

Following on from the Department for Business, Innovation & Skills consultation, the UK Card Association, which represents the credit card industry, has drawn up its response.

It has been suggested that from now on payments made which are above the minimum payment required will be allocated towards the largest debt first, instead of focusing on cheaper debts. It is estimated that this will benefit a quarter of all credit card account holders.

Additionally, credit card companies will contact consumers who repeatedly only make the minimum payment on their cards to explain that this is the most expensive way of clearing their debt.

Melanie Johnson, chair of the UK Cards Association, said: "Our approach will deliver big improvements to customers without smothering competition and choice, which customers value and gain significant benefit from."

According to a recent study by the UK Cards Association organisation, people living in the south-east are most likely to benefit from these changes, as up to 97 per cent of people in the region use plastic.

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