UK Gives Credit Card Co's 2 Weeks To Cut Rates

The UK has the right approach. Big Business and Banks do not always win like in America. As all this cheap money is being poured into the US economy and banks are being propped up on taxpayer money, why would rates be allowed to go up?

Credit card giants have been given two weeks to agree to stop charging exorbitant rates to borrowers or risk losing their operating licences.

Ministers said they were giving Britain's major lenders one last chance to prove they were not profiteering from the downturn. The ultimatum was delivered at a four-hour Whitehall summit called after The Independent disclosed some credit card and store card providers had raised interest rates – in some cases to 30 per cent – even though the cost of borrowing had fallen.

The credit card companies agreed last night to give borrowers who run into trouble paying their bills a "breathing space" of up to two months before they face action. They also pledged to draw up a clear "statement of principles" over their rates by 9 December. It will commit them to give clear information to borrowers, not alter rates constantly and charge "proportionate" levels of interest.

Lord Mandelson, the Business Secretary, and Gareth Thomas, the Consumer Affairs minister, told leaders of the industry that they were alarmed by lenders increasing their rates overnight without justification.

Does Paulson have the balls to do this here? Would Bush ever suggest such a plan? You know the answers.

Source: The Independent