Those in persistent credit card debt could save billions in interest

Cornelia Mascio
Dicembre 14, 2017

The Financial Conduct Authority is stepping up competition by ordering providers to publish information to help customers to compare the service they could receive from rivals. These include firms, at designated timeframes, prompting customers to make faster repayments or proposing repayment plans, as well as intervening earlier if customers are struggling to repay.

In an update on Thursday, the FCA said it has received "widespread support" in principle for its proposals. The FCA expects that the savings would peak in the first few years of the proposed rules being in place, at between £310m and £1.3bn per year, before reducing as fewer customers get into persistent debt over time.

· unsolicited offers of a credit limit increase will be presented "neutrally", rather than as a reward.

The FCA estimates that around 3.3m Britons are mired in persistent debt. This voluntary industry measure should result in approximately 1.4 million accounts per year not eligible for increased credit limits.

This is because the new rules would reduce the average interest paid by customers.

Andrew Bailey, FCA chief executive, said: "The proposals we are introducing will save consumers billions of pounds by reducing longer-term borrowing on credit cards, which can be very expensive and can hide real financial hardship. We remain committed to action to protect consumers in the credit card market as soon as possible".

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