Calls to cap credit card APR

THE Federation of Small Businesses (FSB) is urging that credit card interest rate charges should be capped to help SMEs beat the economic downturn.

The industry body will also be calling for a cut in red tape as part of its New Year message.

It said that capping interest rates would help “cut business costs but give consumers a real boost and cut the cost of borrowing” and follows the move by credit card providers to agree to a set of “fair principles”.

The agreement includes a number of options including the opportunity for customers to transfer deals, freeze accounts and pay off debts at the existing rate in the event the card company wants to raise its Annual Percentage Rate (APR).

John Wright, the FSB’s chairman said: “2009 must be a year of action for small businesses.

“The small business sector is the sector to see the UK out of recession.”