The Financial Conduct Authority (‘FCA’) having analysed the five year history of 34 million card holders has reported that credit card customers with persistent debt but who manage to make minimum repayments are receiving little help from credit card firms.

The FCA commented that these customers should be encouraged to pay off their debt when they could. 40,000 individuals were interviewed about their credit card use and the the FCA’s interim findings were as follows:

  • Approximately 2 million people – 6.9% of cardholders were in default or had defaulted on their debt.
  • Another 2 million may be struggling to make repayment.
  • A further 1.6 million are repeatedly making only the minimum repayment on their cards.

The FCA commented that the cardholders deemed unprofitable faced intervention from the card companies but those who were just about ‘surviving’ were being allowed to do so as they were profitable to the credit card companies.

A final report will be published in Spring 2016.

Christopher Woolard of the FCA commented, ‘This (credit card) is a really important market in the UK. Around 60% of adults have at least one credit card, and there is and estimated 61Bn in outstanding balance….Our study suggests that the market is working well for most consumers, with a range of cards on offer. However for a significant minority who are in persistent level of debt, the market could potentially work better.’

It does not take a genius to realise that this sizable minority could easily be on the edge of a tipping point. A jolt to their finances could see them down and out!

Sam Talby


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