changes to credit terms

Gerry Sutcliffe the consumer minister announced the introduction of a new set of regulations to make credit agreements more transparent and easier to compare.

The significant changes include:

Standard calculation of APR to enable easy comparison of cards, and prominent display of the rate on adverts;
Introduction of an additional signature box to sign if the borrower wants to take out additional insurance or payment protection;
Limiting the amount charged for early repayment of the loan;

The changes in advertising should be in effect from the 31st of October 2004 and to all new agreements from May 2005. The changes to the early repayment charges will begin to take effect from May 2007.

The moves go some way to improving the transparency of credit costs, which can only be a good thing for the borrower.

Further details can be found at DTI.gov.uk Consumer Credit

Changes to Credit terms