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UK small-business group wants credit card rate cap

UK small-business group wants credit card rate cap

The British government should cap credit-card interest rates to help small businesses weather the economic downturn, an industry body said Tuesday.
In its annual New Year message, the Federation of Small Businesses called on the heads of the Treasury and the Bank of England to consider capping credit card companies' interest rate charges in the wake of the Bank of England slashing the base interest rate to just 2 percent to ensure that small businesses could continue to fund their operations.
"We know that entrepreneurs use both personal and company credit cards to finance their business," the federation's national chairman, John Wright, said in the message. Britain's Treasury and the Bank of England "must and can take a very serious look at capping of interest rates charged on credit cards."
The federation's call follows a pledge by credit card companies, made earlier this month during a meeting with the government, to stick to a new set of "fair principles."
As part of the agreement, card companies vowed to stop quickly raising interest rates when customers are late on payments _ instead giving customers the option of transferring to a different credit card deal or freezing the account and being allowed to pay off the debt at the existing rate of interest.


Updated : 2021-03-07 14:36 GMT+08:00