The measures set to take place could save consumers an astonishing £300m a year, however research conducted by building society Nationwide, claim the measures could even save up to £500m!
The crackdown will implement a ban on credit limit and interest rate hikes for those unfortunate that are currently in a certain amount of debt. They will also be given a 60-day right to reject rate increases. So instead of searching for the best credit card deal to pay off another higher interest card, you may be able to rest easy and concentrate on just paying it off.
The package of measures were also designed to curb irresponsible lending and help those facing financial difficulties.
Mr Brown said: “These new rights will put an end to the irresponsible lending practices that people have been most concerned about, and help cut the cost of borrowing.”
The news came after the Government decided on a review of credit and store cards in a consumer White Paper in July last year, the findings caused a concern about the nations debt.
ThinkingMoney.org, a blog about all things financial said the plans showed a well balanced response to concerns that have been growing rapidly through the recession. The proposal will provide the public with greater transparency and authority, which should ultimately allow them to make more sensible and informed financial decisions.
As with any political affair, there will be people who will argue, no matter what. In this case it is shadow financial secretary Mark Hoban. Mark argues Labour (Gordon Brown) had failed to “stand up for British consumers” over the past 13 years, maybe this is too little too late?
“Only the Conservative Party is committed to an interest rate cap for store credit cards, banning energy companies from charging unfair profits on pre-payment energy meters and enabling people without bank accounts to pay their bills via direct debit at the Post Office,” he claims.