asked Her Majesty's Government:

What proposals they have to regulate the charges that are imposed by credit card companies. [HL919]

The Consumer Credit Act 2006 includes a prohibition on the charging of compound interest on default sums charged under consumer credit agreements. Once it is implemented in April 2008, lenders will only be able to charge simple interest.

The OFT has also been looking at the question of penalty charges in respect of credit cards. It has stated that it believed that such charges had been generally set at a significantly higher level than was considered fair and set a £12 threshold for OFT intervention unless there were exceptional business factors.