People struggling with credit card debt could be about to receive more support to help repay their borrowings as part of a new agreement between the industry and the government.

The government had previously raised concerns over the credit card industry, believing that borrowers were paying too much interest on their current debts amid a series of cuts in the Bank of England base rate.

In one example, a lender doubled the APR being charged to one customer because they were in debt whilst research by Moneyfacts revealed that around 10% on lenders had increased interest rates on some of their cards despite a series of interest rate cuts.

In the a meeting between with industry leaders, organised last week by Prime Minister Gordon Brown, a set of “fair principles” were drawn up which, if agreed when the meeting reconvenes in two weeks time, will ensure that more help is given to borrowers who are struggling with credit card debt.

As part of the deal, lenders will be encouraged to pass on any cuts in the Bank of England base rate whilst extra help will be given to those customers who are are having problems making repayments.

Under the new system, lenders will give extra breathing space to struggling borrowers by suspending debt collections for 30 days if a debt advice agency was working with them on a draft repayment plan.

Credit cards have traditionally carried higher rates of interest in comparison to other forms of credit due to the higher risk factor that lenders take on when they issue credit. Conversely, Government figures suggest that around two-thirds of Britain’s 31million credit card holders pay their bills in full and on time every month, effectively giving them interest free credit.