Britain's business department said Wednesday it had secured a deal with credit card companies to give their customers a 30 day grace period if the customers could show they were working with a not-for-profit debt advice agency on how to manage their expenses.

But a summit with credit card bosses called by British business secretary Peter Mandelson did not result in an agreement over the practice of hiking vulnerable customers' interest rates. The move, known as "risk based re-pricing," targets those who are in danger of defaulting on their loans -- jacking up interest rates on troubled customers by as much as 10 percentage points or more.

The companies and the government said only they had made progress on the issue, and that they would work together on a "statement of fair principles" in two weeks' time.

"Those principles would address issues such as proportionality, frequency and transparency," they said after the meeting.

Free-spending Britons have the highest credit card debt of 14 European countries studied by the Datamonitor research group, and the government is hoping to avoid a rash of personal bankruptcies and credit problems that could make economic recovery more difficult.

But credit card companies' interest rates have actually gone up over the past six months despite cuts in the Bank of England base rate. Mandelson called the summit Wednesday in an attempt to get the companies to change their practices.

"Many people feel stitched up by credit card lenders and there are definitely pockets of bad behavior," Mandelson said in an interview with the GMTV breakfast show ahead of the summit. "I want them to accept voluntarily a code of good behavior."

Although the grace period could help consumers keep up with payments through the economic downturn, it won't reduce Britons' level of indebtedness to credit card companies.

Britons' propensity to pay for everything from washing machines to weddings on their credit cards has led to the average person having 1,349 euros (US$1,744) worth of outstanding credit card debt as of the end of last year, according to Datamonitor.

That compares to an average outstanding credit card debt level of just 156 euros in Germany, France, Italy and Spain.

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