New Bank crack­down over credit card boom

The Scottish Mail on Sunday - - Femail -

THE Bank of Eng­land is set to launch a crack­down this week on in­ter­est-free credit cards amid fears that they could trig­ger a new con­sumer debt cri­sis.

So-called teaser deals have pro­lif­er­ated in re­cent years. They al­low Bri­tons to move thou­sands of pounds of debts built up else­where on to the cards at zero in­ter­est for pe­ri­ods up to 43 months. But Bank chiefs claim the of­fers en­cour­age bor­row­ers to take on debt they may not be able to re­pay if the econ­omy slumps. That could leave card providers shoul­der­ing huge losses – and ex­ac­er­bate a down­turn.

The Bank’s Fi­nan­cial Pol­icy Com­mit­tee meets on Wed­nes­day to de­cide a course of ac­tion.

Bri­tons have been bor­row­ing heav­ily re­cently, with the to­tal amount lent on credit cards, loans and over­drafts grow­ing at nearly ten per cent a year.

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