The Government aim to stop people getting into further credit card debt by stopping credit card companies from raising unrequested credit card limits, and to ban the sending out unsolicited credit card cheques.

Credit card cheques may mean that their customers get into further credit card debt as these often carry a higher charge than using your credit card. The Office of Fair Trading (OFT) called for new regulations in 2006 which now means that there is a code of practice where by credit card companies agreed to “assess a customer’s suitability before sending credit card cheques” and provide accurate information about any costs.

The Government believes that restricting the use of consumer credit will promote a more responsible attitude to credit card lending, and the UK can hopefully start to see an decrease in the amount of personal credit card debt.

Consumer Affairs Minister, Gareth Thomas, commented: “We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited

In light of the changes to the housing market, homeowners are more likely to stay in their home to make renovations than purchase a new home. According to a survey by Lloyds TSB, there has been a 19% increase in the number of loan applications for house renovation compared with the previous year.

The research also revealed that 59% of homeowners who were considering selling their home have put these plans on hold. Half of these now plan on carrying out additional home improvements in order to avoid debt management problems and increase the value of their property. The top improvements which new buyers have shown the most interest in are new kitchen or bathroom.

David Wishart, director of personal loans at Lloyds TSB, commented: “In recent months we have seen a significant increase in home improvement personal loan requests. For the last decade homeowners have been able to sit back and rely on rising property prices to increase the equity in their home but sadly this is no longer possible.”

Many debt problems start with individuals struggling to manage a number of different creditors at once. Many find that having to make multiple payments to multiple creditors at multiple times of the month very confusing, which leads to missed payments and interest and charges being added.

Getting debt consolidation advice could help; instead of making multiple payments to different creditors, debt consolidation allows you to make one lower monthly payment which covers all your creditors. There are debt consolidation options which involve taking out a loan but a better option for you could be a debt management plan.

A debt management plan is designed for those who struggle to deal with multiple unsecured creditors and find they are struggling to make payments. A debt management plan allows you to consolidate these debts into a single monthly payment. So although you will be repaying your debt over a longer period of time, you have the peace of mind knowing exactly when and how much your monthly debt repayment will be.

Sometimes interest and charges can be frozen

It seems that many of us are willing to fund our next car with a car loan. UK consumers are falling pray to the credit crunch, as 27% of those who intend to buy a vehicle will use car finance to cover some of the cost.

According to the Sainsbury’s Finance Car Buying Index, 18.4% of the total amount spent on buying vehichcles will be covered through a car loan. UK car finance will total around £9.14 billion. This is a drop of £0.5 billion as the number of people planning on buying cars hits a three year low, probably due to the credit crunch and debt worries.

Steven Baillie, Head of Loans, Sainsbury’s Finance said: “”We’ve been conducting our car buying index now for five years and our findings reflect the economy’s current uncertainty, with one million fewer potential car buyers than 12 months ago.”