Tuesday 30th of June 2009
People struggling under the financial burden of credit card debt may have been given a lifeline by the government.
While an individual voluntary arrangement (IVA) could reduce the credit card interest payments of cash-strapped consumers, the government has announced a stop to the sending out of unsolicited credit card cheques to borrowers, by lenders.
The interest on the cheques is often higher than that of credit cards and there are concerns that this seemingly easy access to quick finance could push Britons further into the red, although IVA help could support them in climbing back into the black.
A spokesperson for consumer watchdog Which? told the Press Association: "This will send a clear message that there is no going back to the irresponsible lending of the past."
With the potential for the temptation of quick credit reduced, borrowers may be able to concentrate on reducing their credit card balances with an IVA.
IVA advice could help the 4.8 million people who Tesco Compare revealed have experienced increases in the amount of cash they owe on credit cards in the last six months.
Outstanding balances are up by an average £412, the organisation stated.
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA advice could help homeowners pay mortgages
