New rules focus on limiting debt

Credit card companies are to be told to stop `luring` customers into higher borrowing, The Times reports.

They will be banned from raising credit limits without asking the customer first, as well as raising interest rates on existing debts and sending out credit card cheques to people who haven`t requested them. In addition, they will now have to put repayments towards the most expensive debt, rather than the cheapest as the majority currently do.

According to a survey by uswitch.com, around one in five people had their maximum borrowing increased without consultation over the past year, and just 68% of credit card users managed to clear their debts in full each month.

The Government, along with creditors, has been urged to give 30 days of breathing space to borrowers who are finding it hard to make their repayments, so they can seek debt advice.

A spokesperson for debt management company Gregory Pennington said: "We would advise anyone worried about credit card debt, or any other type of debt for that matter, to seek debt advice from a professional adviser as soon as possible."

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Gregory Pennington offer debt management plans as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.