The measures include:
• Repayments will clear the highest rate debt first. At present, most lenders, other than Nationwide, apply payments to cheap debt first (such as a balance transfer) meaning expensive debt (such as spending) is trapped accruing interest at a rate of knots.
• Lenders will be forced to explain the impact of only making minimum payments in big and bold language.
• The minimum payment on new accounts will always cover at least interest, fees and charges, plus 1% of the debt.
• Consumers will have the right to choose not to receive credit limit increases and the right to reduce their limit at any time.
• Borrowers will get more time to reject increases in their interest rate. Even now, if your lender hikes the APR, you can refuse it, though you’ll no longer be able to spend on the card
• Lenders will send annual statements detailing all charges.
• Those in financial difficulties will be protected through a ban on increases in their credit limit as well as the ban on increases in their interest rate