26 July 2016
Following the Financial Conduct Authority’s (FCA) publication of the credit card market study final findings report, Peter Tutton, Head of Policy at StepChange Debt Charity said:
“The FCA’s final report highlights its increased concerns about credit card debt. We welcome the FCA’s intention to act on unsolicited credit card limit increases to give greater control to borrowers. Our research has shown people’s debt problems can get much worse when they are given credit they didn’t ask for or even decide they needed.
“We also welcome the attention to responsible lending and the recognition that firms need to intervene more quickly to spot people in financial difficulty and offer better help for those struggling, including with multiple credit card debts. We urge the FCA to deliver quick and effective improvements.
“We have previously called for action on low minimum repayments that can lock people into expensive and long term debt. The FCA’s proposal to test different ways to encourage people to pay their debt down is welcome, but will need to be backed with further action if they do not deliver better outcomes than previous voluntary approaches.
“With the current economic uncertainty and consumer credit at its highest for over a decade, the FCA has fulfilled a vital role in highlighting some of the problems credit cards can cause. It must now act quickly on its evidence to ensure that credit cards are used for short term, affordable borrowing and to avoid seeing even more people are dragged into severe problem debt.”
Notes to editors:
1. 66% of people who have received a debt advice solution from StepChange Debt Charity in 2016 have at least one credit card. 44% have 2 or more and 26% have 3 or more.
2. On average, they owed £8,074. This was a total of £951,154,814