There’s no panacea for the nation’s credit card debt – but the Financial Conduct Authority is having a go at helping people languishing in continual debt.
So-called ‘persistent’ debt is a serious problem. Under the FCA’s definition, credit card customers are in persistent debt if they have paid more in interest and charges than they have repaid of their borrowing, over an 18-month period. While it’s no fun for the individual, credit card firms love these people and, surprise surprise, ‘do not routinely intervene to help them’ according to the city watchdog.
The FCA estimates that around 3.3 million people are in persistent debt, with more than half (1.8 million) for two consecutive periods of 18 months. Today’s proposals aim to address this and will require firms to take steps to help customers repay their balances more quickly and to offer further assistance to those who can’t.
Andrew Bailey, chief executive of the FCA, said: ‘Credit cards can be a very effective product for consumers, but a significant minority of customers experience real difficulties.
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