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What will new FCA rules for credit card firms bring to customers?

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asked Apr 7 by kori12 (1,480 points)

1 Answer

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answered Apr 7 by Nit0 (2,270 points)

New rules should help customers who are in persistent credit card debt. This follows the FCA’s study of the UK credit card market, which found significant concerns about the scale, extent and nature of problem credit card debt.

Under the new rules, firms will have to take a series of steps to help customers in persistent debt. When a customer has been in persistent debt for eighteen months, firms will be required to prompt them to make faster repayments if they can afford to do so. If a customer is still in persistent debt after a further consecutive eighteen month period, firms must take steps, such as proposing a repayment plan, to help them to repay their outstanding balances more quickly. Customers who do not respond, or who confirm that they can afford to repay faster but decline to do so, would have their ability to use the card suspended. 

The FCA also proposed that where a customer cannot afford any of the options proposed to repay their balance more quickly, firms must take further steps to assist them to repay the balance in a reasonable period, for example by reducing, waiving or cancelling any interest or charges. It is expected that firms would normally suspend use of the customer’s card during this period.