The Liberal Democrats have responded to the new consumer credit laws for lenders, saying the legislation is long overdue.
The rules are designed to make credit agreements and loan adverts clearer.
Liberal Democrat shadow secretary of state for trade and industry Malcolm Bruce says: “The blunt truth is credit companies have led the public by the hand into unprecedented levels of consumer debt. Consumers have been overexposed to easy credit and made immune to theperils of debt.
“Three out of four people don't even know the interest they are paying on their credit cards and credit companies have contributed to this lack of consumer awareness. It is frankly incredible that credit card companies are threatening to pass the costs of tighter legislation on to the consumers in terms of higher interest rates.”
He adds: “These companies have been allowed too much freedom to exploit a credit-hungry public and regulations controlling their actions are long overdue.
“Banks and finance companies have been making excessive profits from interest rates which would have been more beneficial to the wider economy if retained in consumers hands.”