Credit Card Lenders

card provider

Novel regulations affect credit card lenders Since 1 February 2011, lenders have had to comply with a number of rules concerning the promotion of ADRs, the way in which they evaluate the applicants' capacity to pay back their debt and the timeliness and accuracy of the information they provide to clients. These are the most important effects of the EU Consumer Credit Directive on lenders and borrowers:

The lender and comparator websites must now submit a "representative annual percentage rate of charge " indicating the interest rates applied to at least 51% of candidates. So far, UK lenders have provided a "typical" annual percentage point of charge which is likely to be available to 66% of candidates. However, the new action should benefit users in some other EU Member States who have not previously enjoyed this degree of consumer protections.

The borrower's credit rating must be verified before he offers a credit card or increases his credit line. Creditors must also give appropriate justification for the credit facility proposal, taking into account the costs and implications of non-payment. Having signed a new credit card subscription, the borrower now has 14 working days in which to modify their opinion and terminate the card.

Edward Davey, Secretary of Consumption, said the new regulations should help promote "a climate of accountable lending". It added: "With new statutory powers for citizens and greater responsibilities for creditors, citizens will be better able to take their cash into their hands". In 2011, card holders are expected to pay 2.8 billion pounds; has the card reforms not gone far enough?

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