Credit Card companies must do more to help those in debt, say the FCA.
The Financial Conduct Authority (FCA) has published proposals that could mean credit card companies cancelling any interest or charges in extreme cases.
Credit card companies would be expected to identify people in difficulty quicker and provide faster access to repayment plans.
The FCA defines someone as being in credit card debt if they have paid more in interest and charges than they have repaid of their borrowing over an 18-month period.
The main points in the proposal are:
- After 18 months: Firms should prompt customers to make faster repayments, if they can afford it
- After three years: Providers must propose a repayment plan to help clear debt more quickly
- If a customer still cannot afford to repay the main debt more quickly, firms should consider reducing, waiving or cancelling any interest or charges
There have been concerns expressed over the personal debt levels in the UK. The latest figures from the Bank of England suggest that the annual pace of growth in credit card debt is at its fastest since February 2006.