Cap on interest rates could 'cut debt problems in half'
Cap on interest rates could 'cut debt problems in half'
- Wednesday, 20 October 2010The government announced on October 15th that it will be reviewing interest rates on store and credit cards, which can lead to
debt problems.
Consumer minister Edward Davey and Mark Hoban from the Treasury will be conducting the review.
The pair hope to tackle unfair bank charges, cap the interest rates on store and credit cards and introduce a 'cooling-off' period of seven days when a consumer signs up to a store card.
It is hoped that these new measures will help prevent consumers avoid
debt problems and provide them with more advice when their borrowing leads them into money trouble.
Richard Sorsky, money advice co-ordinator at the UK Insolvency Helpline, stated that a cap on store and credit card interest rates would halve the
debt problems in the UK.
He said: "It is about time that the government regulated the rates out there. At the moment probably 50 or 60 per cent of the calls that we get are from people who are in debt due to extortionate interest rates.
"We have always said if interest rates weren't so high on unsecured borrowing there wouldn't be half as much debt."

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