The Finance & Leasing Association is urging the government to consider latest moves by lenders before introducing new regulation.

Latest figures released show that spending in March on loans, store cards and credit cards was down by 33%, 20% and 3% respectively compared with a year ago. Meanwhile, credit for car sales grew by 31%.

Against this background, the FLA has called on the Government to think very carefully before implementing its proposals to cap interest rates on credit and store cards and impose a seven-day cooling-off period on store cards. It claims further regulation could leave consumers with less choice from legitimate lenders and force some into the arms of loan sharks.

Fiona Hoyle, FLA head of consumer finance, said: “Lenders are already making significant changes to the way they sell credit