Credit cards are the latest financial bastion to come under fire from the Financial Conduct Authority (FCA) as the regulator confirmed a review into the UK’s £150 billion credit card market will start soon.
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FCA chief executive Martin Wheatley said that as 30 million people have at least one credit card, the regulator should examine whether competition in the market was working effectively.
The FCA took on regulating consumer credit from April 1.
A report from the regulator revealed 9 million people are in serious credit card debt and that many were ‘survival borrowers’ borrowing with a payday loan or a credit card, to help pay their day-to-day bills.
Wheatley said: “The key priority here has to be the most vulnerable who struggle to manage credit cards and their bills.
Brits hold 70% of European credit cards
“Out of the 30 million or more credit card holders, more than 1 million borrowers make 12 or more consecutive minimum monthly payments.
“These ‘at risk’ households hold multiple cards and revolve balances every month to try to keep above water.
“We want to challenge the industry over whether issuers are helping their most indebted consumers to stop plunging into further debt?”
Credit card market facts
- Financial charity StepChange reckons around 10% of people asking for advice have an average £27,000 debt and hold five or more credit cards
- The UK has 56 million credit cards in issued
- 30 million Britons have a credit card. Which is 70% of all European credit cards, according to a UK card association
- Gross spending on cards in the UK was £150 billion last year, with around £57 billion in outstanding balances.
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser
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