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Action on ‘persistent’ credit card debts welcomed

Money Advice Trust comments on FCA Final Credit Card Market Study.

 
The Financial Conduct Authority (FCA) has today published the final report of its Credit Card Market Study, including a package of measures to help consumers take better control of their spending.  
 
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline commented:
 
"The FCA is right to warn of the problem of ‘persistent’ credit card debts, and we welcome the industry-led measures announced today. Credit cards can be a good way to borrow for short periods, if you can repay in full each month – but they can be very expensive over the long run if you cannot.
 
“The problem of persistent minimum payments is a particular concern, with 750,000 people regularly paying only the minimum for three consecutive years.  We need to do more to help this group of people, who are just about keeping their head above water, but without making a serious dent in repaying what they owe.
 
"Most credit card companies intervene effectively when people miss their payments, including by signposting customers to free debt advice from National Debtline and other charities. 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.
 
“In addition, more control over credit limits, the ability to request a ‘later than’ payment date and a smarter approach to repayments will all help to ensure that the credit card market works for all consumers.  We look forward to working with the FCA and industry as these remedies are developed.”
 
National Debtline offers free advice at www.nationaldebtline.org or on 0808 808 4000, Monday to Friday 9am to 8pm.
 
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