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.
Your personal credit score plays an important part in securing new loans and credit, and can affect your financial life for better or worse. Lenders use the information in your credit file to determine whether you present a high risk of default, and if your credit score is low, you may find it difficult to […]
Credit unions offer a range of financial products including current accounts, savings accounts, and loans, and can be a good alternative to banks and building societies whilst also helping your cash flow. There are credit unions all around the UK, almost 100 of them operating in Scotland. They’re not always widely advertised, however, and although […]
It’s a worrying situation when you realise your outgoings exceed your income, and it can be difficult to prevent debt in this situation, but there are solid steps you can take to get back on track – you just need to act quickly. Increasing your income or reducing the money going out are essentially what […]
If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work. As far as your old employment is concerned, it’s important that you check your final wage slip to […]
If you are a Scottish resident in financial difficulty, you may have entered into a Trust Deed in order to restructure debt repayments to creditors. A Trust Deed is a fixed voluntary agreement made between the debtor and creditor, with the help of a trustee. Debt is broken down into smaller, affordable instalments, typically lasting […]
A Debt Arrangement Scheme (DAS) is a government backed scheme which allows you to repay debt through contractual, monthly instalments without the threat of legal action and incurring penalties or interest. The scheme was established in 2004 for Scottish residents in debt, providing an alternative solution to sequestration, the Scottish equivalent of bankruptcy. A Debt […]