Tuesday 27th of October 2009
Although the Citizens Advice Bureau (CAB) is welcoming the news that the government is to offer extra protection to credit card customers, it may come too late for some indebted consumers who could turn to an individual voluntary arrangement (IVA) to solve their debt problems.
The government announced this week that it is to impose regulations on credit card companies regarding their ability to raise borrowing limits and interest rates.
But Teresa Perchard, director of public policy at the CAB, said: "We see far too many people on low incomes who have drifted into very high levels of borrowing as a result of unsolicited increased access to credit."
People who have spent outside their means could now be tempted to seek IVA advice in an attempt to repay what they owe.
An IVA can freeze interest rates on unsecured debt, such as credit card borrowings, which can prevent debt from spiralling out of control.
IVAs could also reduce reliance on credit cards by making debt repayments more affordable for worried Britons.
By Mark Waterman
- 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
- Information on IVAs to help Brits who can't stop spending?
