Credit Card Companies Told to Do More to Help Customers with Long-term Debts
July 27, 2016
Credit card lenders ought to be doing more to help their customers who have been unable to repay their debts over periods of several years or more.
That’s according to the Financial Conduct Authority (FCA), which has published a new report focussing on how credit card companies deal with customers who are heavily in debt but only ever make the minimum required debt repayments.
“Credit cards are suited to short term borrowing and can be an expensive way to borrow large amounts over a long period,” the report said.
“We are concerned about the volume of borrowing behaviour that does not fit this pattern.”
According to the FCA, which regulates the UK’s financial services industry, there are as many as 1.4 million people across Britain who only ever make minimum credit card debt repayments each month.
The result of this is said to be that many thousands of Brits are being left with persistent and damaging debt problems that they find impossible to escape from.
Credit card companies have said that they will focus on finding ways to help people who are only managing minimum repayments to ease their debt burdens.
“We need to get help to people earlier, so that those who are regularly making just their minimum repayments receive the free advice they need,” said Joanna Elson, chief executive of the Money Advice Trust.
“We need to do more to help this group of people, who are just about keeping their head above water without making a serious dent in repaying what they owe,” she said.
Speaking on behalf of credit card companies, Richard Koch from the UK Cards Association said in response to the FCA’s report and its criticisms: “The credit card industry will continue to engage constructively with the regulator in the coming months to ensure that effective and proportionate remedies are developed for these customers.”
If you are finding it difficult to keep up with your credit card repayments or you are burdened with long-term debt management problems then Scotland Debt Solutions may be able to help. Contact one of our offices today to arrange a free and completely confidential consultation.
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