The latest figures from StepChange Debt Charity (StepChange) show that, in the last year, over 200,000 people contacted it for help with a total of £1.7 billion of credit card debt and the average person owing nearly £8,500.
The charity is calling on the FCA to commit to substantial changes to credit cards amid fears that, despite being designed for short-term lending, they have led to long-term debts for millions of people.
The charity is also calling on the FCA to work with lenders and other stakeholders on a package of measures to make credit cards work better for people who fall into financial difficulty and to help prevent people from falling into difficulty in the first place. The package includes measures that reform minimum repayments, bring down balances, ensure responsible lending and reduce the number of people struggling with multiple credit cards.
Mike O’Connor, Chief Executive of StepChange, said: “…This is now a real test for the FCA and to succeed, it must commit to direct action that will prevent credit cards from becoming long term debts. With robust measures to tackle how these products work and eradicate the irresponsible lending that leads to multiple maxed-out cards, we can help those in financial difficulty recover and ensure that credit cards are used as the affordable, sustainable, short term products they are meant to be.”