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New credit card rules could help customers shake off persistent debt
New credit card rules could help customers shake off persistent debt
This is a duplicate of the Blog Entry made on: 3rd April 2017 14:26
This is a duplicate of the Blog Entry made on: 3rd April 2017 14:26
The FCA says persistent debt sees customers pay an average of £2.50 for every £1 repaid because of interest and charges.
New rules governing the credit card market could see customers having their cards suspended while they work to pay off persistent debt. The changes suggested by the Financial Conduct Authority (FCA) call on firms to take a more proactive approach with struggling customers. It could mean agreeing repayment plans to clear the debt quicker; or firms reducing, waiving or cancelling interest or charges where a repayment plan is still unaffordable. Customers who fail to cooperate or who cannot afford the repayment plans would lose the use of their cards. An FCA study found many firms did not intervene because persistent debtors - defined as those who have paid more in interest and charges than in actual debt repayments over an 18-month period - are often very profitable.It estimates around 3.3 million people in the UK are in persistent debt, with more than half (1.8 million) remaining so for at least two consecutive periods of 18 months. The proposals also suggest giving customers greater control over increases to their credit limits by offering choices around how and when increases can be offered and making the process of declining them more straightforward.....Read more here
New rules governing the credit card market could see customers having their cards suspended while they work to pay off persistent debt. The changes suggested by the Financial Conduct Authority (FCA) call on firms to take a more proactive approach with struggling customers. It could mean agreeing repayment plans to clear the debt quicker; or firms reducing, waiving or cancelling interest or charges where a repayment plan is still unaffordable. Customers who fail to cooperate or who cannot afford the repayment plans would lose the use of their cards. An FCA study found many firms did not intervene because persistent debtors - defined as those who have paid more in interest and charges than in actual debt repayments over an 18-month period - are often very profitable.It estimates around 3.3 million people in the UK are in persistent debt, with more than half (1.8 million) remaining so for at least two consecutive periods of 18 months. The proposals also suggest giving customers greater control over increases to their credit limits by offering choices around how and when increases can be offered and making the process of declining them more straightforward.....Read more here