Credit card providers are set to delay increasing interest rates for customers who have fallen into arrears on meeting payments, it has been reported.
This means that customers will have the right to cancel their card and pay off their debts within a reasonable period without the rates being increased.
The news follows warnings from the government that the sector would be referred to the Office of Fair Trading if a new code of conduct was not drawn up.
Credit card consumers will now have the option to freeze their account at its existing rate or transfer their deals.
Gareth Thomas, consumer minister, commented on the changes, saying: "I recognise that these changes will not be without financial pain for credit card companies, but it was vital that we nipped in the bud the bad practices that were causing real hardship for borrowers."
Meanwhile, earlier in the month the Bank of England announced that it had reduced the base rate of interest to two per cent.
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