Regulator raises concerns about credit card debt
The Financial Conduct Authority (FCA) has today released its interim findings of its wide-ranging credit card market study.
The regulator has raised concerns that, whilst there was clear evidence of effective support mechanisms for the 2 million people that have fallen into arrears, the 1.6 million people that were just ‘getting by’ by making the minimum payment were not being helped as effectively.
The regulator said it was concerned that the profitability of these customers to the credit card companies may be contributing to the lack of support.
The Financial Conduct Authority (FCA) has today released its interim findings of its wide-ranging credit card market study.
The regulator has raised concerns that, whilst there was clear evidence of effective support mechanisms for the 2 million people that have fallen into arrears, the 1.6 million people that were just ‘getting by’ by making the minimum payment were not being helped as effectively.
The regulator said it was concerned that the profitability of these customers to the credit card companies may be contributing to the lack of support.
Commenting on the findings, Chief Executive of Debt Advice Foundation, David Rodger, said "Credit card debt persists as a significant problem. It actually accounts for 37% of an average borrower’s impaired debt, whilst being one of the most expensive forms of credit."
"Given the magnitude of credit card debt and cost of this form of credit, effective mechanisms to encourage borrowers to repay their debts are essential."
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