Monday 11 February 2019
In March 2018, new rules by the Financial Conduct Authority came into force requiring credit card companies to tackle the problem of persistent credit card debt.
This is defined as customers who pay more in interest than they do off the capital for a period of 18 months or more. These customers may be better served by other products or may be in problem debt but all of them are paying a significant cost to service their debts.
Since the new rules came into force, credit card companies have been contacting customers who fall in to this category, to inform them of the situation and call on them to act. Companies are also required to contact the customer at 18 and 27 months to remind them of free debt advice as well as prompting the client to pay a little bit more.
The Money Advice Service have developed some independent information for customersopens in new window in receipt of one of these letters, detailing why they have received them and what they can do in response. We are encouraging any credit card companies to raise awareness of this guide through their existing channels and targeted engagement on this issue. The guide is available in English and Welsh.
