A new agreement between the Government and the credit and store card companies will give new rights to over 30 million credit card users in Britain.

Pendle MP, Gordon Prentice, has welcomed the deal saying the changes will be introduced by the industry later this year.

The Government’s agreement with the card companies will mean the most expensive debt is paid off more quickly, and better repayment plans for new customers.

Speaking from Westminster, the MP said: "I know there are lots of people who are crushed by credit card debts. These new consumer rights will help people manage their finances and also deter irresponsible lending."

New Consumer Credit Directive regulations and Office of Fair Trading "Irresponsible Lending Guidance" are to be introduced before the summer, requiring lenders to check customers can afford a loan. Lenders will have to give clear information on new loans and give a 14-day cooling off period during which new loans can be cancelled.

All consumers will have access to their credit records online for £2 or free of charge from June 2010.

Note to Editors: The five new rights for credit card users agreed by the Government and the UK Cards Association and the Finance and Leasing Association (representing store card companies) are:

Right to repay: consumers’ repayments will always be put against the highest rate debt first. For consumers opening new accounts the minimum payment will always cover at least interest, fees and charges, plus one per cent of the principal to encourage better repayment practice.

Right to control: consumers will have the right to choose not to receive credit limit increases in future and the right to reduce their limit at any time; and consumers will have better automated payment options. Consumers will be able to do both of these online.

Right to reject: consumers will be given more time to reject increases in their interest rate or their credit limit.

Right to information: consumers at risk of financial difficulties will be given guidance on the consequences of paying back too little; and all consumers will be given clear information on increases in their interest rate or their credit limit including the right to reject.

Right to compare: consumers will have an annual statement that allows for easy cost comparison with other providers.

In addition, consumers who are at risk of financial difficulties will be protected through a ban on increases in their credit limit as well as the ban on increases in their interest rate, and card companies will work with debt advice agencies to agree new ways they will provide targeted support to consumers at risk.

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