MP argues for cap on credit card debt
Credit card debt should be written off once borrowers have spent more than three times the original amount borrowed on interest payments, Labour MP Yvonne Fovargue has said.
Introducing her Credit Card Debt Limit Bill on 27 November 2012 to the Commons, Ms Fovargue said she aimed to prevent credit card debt "spiralling upwards and out of control".
The number of people seeking help with credit card debt had "risen sharply" in the last five years, she said.
"Many are now using them simply to make ends meet, and what is more they are committing to further credit card borrowing when one credit card is maxed out in order to plug the gap in household finances," the MP for Makerfield said.
"Indeed multiple credit card debt is now a feature of life in the 21st century."
She told MPs: "My bill would place that cap at three times the original sum borrowed after which there would be no liability to pay.
"It would effectively limit the amount by which creditors can increase the size of a debt by the addition of the interest and charges where people are struggling.
"It's not about letting people off lightly or allowing them to default on their debts. Credit card companies will still get their profits. It's about giving people the guarantee that their debt will be paid off at some definite future date and it won't spiral upwards."
The bill was given an unopposed first reading but stands little chance of becoming law without government support.
Watch Yvonne Fovargue here
Introducing her Credit Card Debt Limit Bill on 27 November 2012 to the Commons, Ms Fovargue said she aimed to prevent credit card debt "spiralling upwards and out of control".
The number of people seeking help with credit card debt had "risen sharply" in the last five years, she said.
"Many are now using them simply to make ends meet, and what is more they are committing to further credit card borrowing when one credit card is maxed out in order to plug the gap in household finances," the MP for Makerfield said.
"Indeed multiple credit card debt is now a feature of life in the 21st century."
She told MPs: "My bill would place that cap at three times the original sum borrowed after which there would be no liability to pay.
"It would effectively limit the amount by which creditors can increase the size of a debt by the addition of the interest and charges where people are struggling.
"It's not about letting people off lightly or allowing them to default on their debts. Credit card companies will still get their profits. It's about giving people the guarantee that their debt will be paid off at some definite future date and it won't spiral upwards."
The bill was given an unopposed first reading but stands little chance of becoming law without government support.
Watch Yvonne Fovargue here
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