FLA criticises Liberal Democrat's view on credit cards

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FLA criticises Liberal Democrat's view on credit cards

The Finance & Leasing Association (FLA) has claimed that the Liberal Democrats' pledge on maximum interest rates for credit cards could lead to consumers being left out of pocket.

This is the opinion of Fiona Hoyle, head of consumer finance at the industry body, who said that such a cap on the interest charged on credit and store cards would not work.

She suggested people could end up paying too much if the cap is too high and may be driven to loan sharks if the cap is too low and lenders decide to leave the market.

Ms Hoyle stated: "In other countries which impose a maximum interest rate, the cap becomes the normal price for credit and rates that are lower than the cap all converge towards it."

This week, the FLA spokesperson also stressed the placing restrictions on store cards could harm the economic recovery of many high street shops.

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