MP calls for cap on credit card debt

MP calls for cap on credit card debt

28/11/2012

Mounting credit card debt could be written off if a Credit Card Debt Limit Bill translates to legislation in parliament. Introduced to the Commons by Labour MP Yvonne Fovargue this week, the Bill was proposed in an attempt to stop credit card debt "spiralling upwards and out of control.” If realised, it will mean that credit card debt could be written off once borrowers have spent more than three times the original amount. Explaining how the new rules would work, Ms Fovargue, MP for Makerfield, 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 and listed for a second reading on 25 January but is unlikely to become law without further government support. The proposals come in spite of the fact that recent figures from the Consumer Credit Counselling Service (CCCS) revealed a fall in the number of borrowing seeking help over credit cards debts. Data from the charity showed that those seeking advice for debt problems related to credit cards reached just over 76,368 in the first half of 2012. This is down from 80,971 in the first half of 2011 and 85,315 in the first half of 2010. To get the best interest rates and rewards on your borrowing, you can compare credit cards with MoneyExpert.