Credit Cards

How many credit cards are in circulation in the UK?

{$response} - it's 66 million! The flexibility of credit cards is what makes them useful, but it can also allow consumers to quickly accumulate unsustainable debts. This is of particular concern when people are facing financial pressures due to the downturn.

We will therefore review the regulation of credit and store cards, including consulting on further regulation around:

• Restrictions on card providers' ability to raise interest rates on existing debt.
• Requiring that repayments to a credit card account are allocated to debts attracting different interest rates on a fairer basis.
• Requiring higher minimum payments so the debt can be paid back in a reasonable period (the majority of minimum repayments are set very low and can take 25 years or more to pay back).

High cost credit

What is the typical APR (annual percentage rate) of payday lenders?

{$response} - it's 1285%! People on low incomes or with poor credit records who are unable to get credit from high street banks may instead use more expensive home credit (also known as doorstep lending).

The Government is committed to providing a safety net for people in need who are struggling to find affordable credit. In the recent Budget, we allocated:

• An additional £270 million over the next two financial years to the Social Fund, which provides grants and interest free loans to people at times of crisis.
• An extra £18.75 million to the Growth Fund, which supports community-based lenders such as credit unions and community development finance institutions to provide affordable loans for a wide range of people on low incomes who cannot access mainstream credit.

Internet shopping

In the UK in 2008, what percentage of consumers used the internet to purchase goods or services?

{$response} - it's 57%! Almost one in three UK internet users are not shopping online, with a lack of trust in the internet given as the biggest reason.

To address these concerns, the Government will:

• Set up a single complaints register for any citizen encountering an on-line scam
• Set up a new enforcement team to tackle on-line consumer protection issues and protect consumers from e-crime.

The Government has also asked the Office for Fair Trading to develop a longer term national strategy for consumer protection and enforcement on the internet by the end of 2010.

Debt

In 1990 the household debt to income ratio (including mortgages) was 97%. What was it in 2008?

{$response} - it's 150%! One of the biggest risks for people in difficulty with their debts is the loss of the family home.

The Government has introduced key measures to provide help to homeowners in difficulty, including:

• Enhancing the Support for Mortgage Interest scheme to give out of work households help with interest payments on eligible capital up to £200,000 (twice as much as before).
• The roll out of a £285 million Mortgage Rescue Scheme for some of the most vulnerable households
• The launch of Homeowners Mortgage Support which will enable households defer a proportion of the interest due on their mortgage for up to two years.

We will also fund a new self-help toolkit being developed by the Money Advice Trust in the next few months to support people in difficulty with their debt. The toolkit will be available through debt advisers for those who want to negotiate repayments themselves and will help debtors to reach agreement more speedily with creditors.

Home heating

Domestic gas prices rose by how much in 2008?

{$response} - it's 49%! In its report in October 2008 Ofgem, the gas and electricity markets regulator, identified a number of important areas where competition in the gas and electricity industry could work more effectively, particularly for more vulnerable consumers.

Following responses to that report Ofgem are now proposing a range of remedies:

• Improving the information that consumers have so that they can make well informed decisions about their supplier
• A number of changes to the rules governing door to door to ensure that consumers have good quality information before deciding whether to sign up
• Consumers should be reminded at least once a year by their supplier that they are able to switch supplier if they wish to do so.

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For practical help on consumer issues, visit Consumer Direct:

Photo credits (CC licensed on Flickr): eliazar, nedster, stuartpilbrow, dennissylvesterhurd, carlos_lorenzo

The Department for Business, Innovation and Skills has published a new white paper setting out how it will build a flexible consumer policy that is relevant now and for the next 10 years.

It also sets out how the Government will provide real help now to vulnerable consumers.

Take this quick quiz to find out how much you know about consumer issues and how the initiatives in this report can help you.

The quiz contains five multiple choice questions. Click on the relevant circle. To select the answer you think is correct.