No ban on rolling credit - Lagarde
Revolving credit is too useful and responsible for too many jobs for it to be banned, despite links to debt problems
FINANCE minister Christine Lagarde has refused to ban revolving credit, despite it being blamed by the Socialist Party for families’ increasing debt burden.
She says she would prefer to see responsible lending rather than a ban on rolling credit as many jobs are at stake. “40% of catalogue sales in La Redoute or Trois Suisses use these credit cards. They are responsible for thousands of jobs.”
Revolving credit allows people to keep on borrowing up to a certain ceiling, with no fixed repayment period. Socialist MP François Brottes has proposed a law banning it as he says people get into major debt too easily as they do not pay off their balances.
Ms Lagarde says rolling credit is “useful and necessary” and she will use a meeting on the debt problem in Seine-Saint-Denis today to reveal new consumer credit measures.
She aims to protect the consumer and plans quicker repayments on rolling credit and restrictions on the use of finance firms’ loyalty cards as credit cards.
Banks will also be forbidden from loading extra charges on indebted families if they are meeting their repayment schedule.
