July 21 2004. Consumers are soon to get clear and detailed information about their credit agreements from lenders before they sign up. And excessive charges for settling an agreement early will be replaced with a new fairer system.

The move is the first set of regulations in the Government's shake-up of the consumer credit market aimed at increasing transparency and improving consumer protection while minimising the impact on business.

The new regulations will tighten up credit advertising so that consumers will be better able to compare products; introduce a standard way of calculating the annual percentage rate (APR) for credit cards; when an APR appears in an advert, it will always have to be more prominent than all the other financial information; and introduce a new signature box for consumers to sign if they are purchasing any additional insurance products, such as payment protection plans, on credit.

The changes will apply to credit advertisements from 31st October 2004, and to all new agreements from May 2005. The new rule setting out what a lender can charge when an agreement is settled early will apply to existing agreements of up to ten years from May 2007. For loans over ten years it will apply from May 2010.