New Clause 1 - Credit-token specification
Consumer Credit Bill
3:44 pm
Mr James Plaskitt (Warwick and Leamington, Labour)
Yes. Interestingly, when the Treasury Committee requested information from card issuers on how many times cheques are used in that way, they were unwilling to provide any reliable information. Instead, the issuers' material is very heavy on suggesting to customers how they should spend the cheques, but extremely light on information telling customers how much the cheques will cost them.
It is important to acknowledge that the cheques do not extend anyone's credit limit. However, they are used to prod consumers to spend up to their credit limit. Therefore the customer may have to apply for an extension of their credit limit earlier than might otherwise have been the case, or the card supplier may make an unsolicited offer of an extension to the credit limit. It may bring forward the time at which the customer has to resort to taking out another card and, hence, the process of accumulating cards begins. The Committee has discussed that problem. If a customer is using up their credit limit it also becomes more likely that they will incur penalty fees, and the Committee has also discussed the impact of that.