In an effort to halt the rapid growth in credit card debt, the Government is considering introducing legislation that will stop credit card companies from increasing credit limits except in response to a specific request from the customer. The current practice is seen as only fuelling the fire and making things worse for many people.



The issuing of unsolicited credit card cheques will also come in for scrutiny. Ministers are likely to request that the practice should cease. The cheques are nothing more than an encouragement to go further into debt. To make matters worse any purchase made using them does not normally have the same level of protection as other credit card purchases and the advance is considered a cash advance thus attracting the highest rate of interest. A debt cleared with one will often attract less favourable terms than the original debt!

A significant growth in the numbers of people seeking debt advice and help is being reported by debt help organisations. As the financial news appears more depressing almost daily, many people are becoming increasingly concerned about ongoing income levels and are looking for help to regain control of their financial position.

The estimated credit card debt in Britain is estimated to stand at over £53 billion. Those with card balances need to act now to regain control.

To help people in difficulty debt help organisations have a number of options available to them. The most common devices are Individual Voluntary Arrangements (IVAs), debt management plans and Trust Deeds. All work in similar ways by rescheduling debt over a specific period to make the problem more affordable and thereby restoring a degree of control to the individual.

By spreading the total debt over a specified period which is usually longer is the normal practice. Additionally by prioritising those debts such as mortgage or rent, council tax, utility bills and living costs (including travel to work) the home and job of the individual are protected as far as possible. This in turn benefits the other debts which could not be repaid if the individual lost their job.

A debt management plan is an informal way of repaying multiple unsecured balances with only one monthly payment, thus making the management of difficult financial position easier.

With an IVA unsecured debts are repaid over a fixed period, usually five years. At the end of the arrangement outstanding balances will be written off. In Scotland a similar arrangement exists called a trust deed. It differs in that the normal period is three years.

In offering free IVA help or debt advice reputable debt help organisations will consider an individuals specific circumstances to agree the most suitable option for them.