The government will today unveil its consumer protection plans that will include a ban on credit card cheques.
One of the main contributory factors to severe debt problems is too much credit card debt, and credit card cheques have simply made it far easier for a consumer to rack up big bills. Critics of the cheques have been demanding a ban for years, saying that they are simply a ploy by the banks to encourage people to use their cards more.
Inevitably, the people with the least self control will end up in severe financial difficulty, when they start using credit card cheques to pay normal house hold bills.
Removing the temptation could help some consumers to keep a tighter reign on their finances, and they may be less likely to end up with an unmanageable situation. This could help some consumers to avoid insolvency, or having to sign up for some sort of debt management plan.
The government is also planning to announce how it will help people facing debt problems, and measures that will help consumers avoid being conned by rogue traders during the recession. Historically, an economic downturn is usually accompanied by a boom in cons and scams, as desperate individuals search for an easy way to make a fast buck.
The announcement may be a little late for some people, since the Bank of England figures show that UK residents owe £233 billion on personal loans, overdrafts and credit card debt.
The government is expected to look at ways to make lending practices more responsible. In light of recent research from Uswitch, which stated that 20% of card holders saw their credit limits rise over the last year when they had not requested it, the government needs to act sooner rather than later.