LONDON (Reuters) - The government announced new rights for credit card users on Monday that it says will save consumers millions of pounds and give them more control over their finances.
The new rights were secured in an agreement between the government and the credit and store card companies.
The industry will introduce the key changes this year and they will be given statutory force as soon as possible, the government said.
A general election is widely expected on May 6, and recent opinion polls show the Labour Party is narrowing the lead of the Conservatives.
"These new rights will put an end to the irresponsible lending practices that people have been most concerned about, and help cut the cost of borrowing," Prime Minister Gordon Brown said in a statement.
The government estimates the new rights will save consumers almost 300 million pounds a year.
Under the agreement, the most expensive debt on consumers' cards will be paid off first, reversing the current practice. Consumers will have the right to choose not to receive credit limit increases and the right to reduce their limit at any time.
They will be given more time to reject increases in their interest rate or their credit limit.
Consumers will have an annual statement that allows easy cost comparison with other providers.
People at risk of financial difficulties will be protected by a ban on increases in their credit limit and a ban on rises in their interest rate.
The Conservatives said the Labour government had consistently failed to take tough action to stand up for consumers and had failed the test again.
"Only the Conservative Party is committed to an interest rate cap for store credit cards, banning energy companies from charging unfair profits on pre-payment energy meters and enabling people without bank accounts to pay their bills via direct debit at the Post Office," Conservative financial services spokesman Mark Hoban said in a statement. ( source Reuters)
(Reporting by Adrian Croft; editing by Tim Pearce)
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