The new rules allowing you to reject increases to your credit card interest rate

1 min Read Published: 30 Dec 2010

New rules on credit cards come into force next month which will protect cardholders and allow them to manage their debt more easily.

What are the changes?

  1. Under the new rules the most expensive debt on your credit card will always be paid off first. Many credit cards companies currently try to make more profit from their customers by applying monthly payments to the cheapest debt first. Typically this will be the debt incurred whilst on a 0% introductory offer, leaving any other debt racking up high interest. Clever eh!
  2. The minimum monthly payment will be set so that you are always paying off some of your debt each month. Over the past few years minimum payments have been allowed to drift ever lower, resulting in some cardholders never actually paying off any of their debt each month. Which is a nice little earner for the credit card companies!
  3. Credit card companies can no longer send out unsolicited cheques – which they currently do to encourage people to get into debt.
  4. In future, credit limits can only be increased after affordability checks have been carried and 30 days notice given. Also any rate increase must be communicated 60 days prior to implementation, the customer can decline any increase, close their account and pay off any debt at the old rate.

There will also be more flexibility when you set up a monthly payment amount of your choosing and more detailed communications about your account.

Although these changes have been brought in voluntarily by the credit card companies, it comes after intense pressure from the Government for them to act more responsibly. Too little too late for some people.

(Image: Michelle Meiklejohn /