The rules mean that lenders will no longer be able to bury important financial information in adverts.
Consumer Minister Gerry Sutcliffe said:
"These new rules will not be a burden for lenders who already act responsibly and provide clear information in their adverts. But they will tackle the tricksters who set out to mislead consumers by selectively quoting the terms and costs of their products.
"Taken as a whole, the new laws will ensure that consumers are given the key information that they need at every stage in the borrowing process about the cost of a loan or credit card. Consumers will be empowered to choose, with confidence, the deal that is best for them."
The changes to the consumer credit advertising regulations:
introduce a standard way of calculating the annual percentage rate (APR) for credit cards, a key factor that consumers use to compare products;
mean that when an APR appears in an advert, it will always have to be more prominent than all the other financial information;
mean that at least 66% of consumers must qualify for the quoted typical APR; and
include new warnings encouraging consumers to think carefully before securing debt against their home.
It will be a criminal offence to break the new laws, and doing so could ultimately mean a business could loose its consumer credit licence.