Debt campaigners are calling for the Financial Conduct Authority to step up protection for low-income consumers as credit card debt hits its highest point since 2008.
The End the Debt Trap Coalition has insisted that the financial watchdog must provide a cap on the costs of credit cards – as they did to target high-cost credit in 2015 – after seeing consumer credit debt reach £217bn with a third of that amount owed on credit cards.
The group – including Centre for Responsible Credit, Jubilee Debt Campaign, New Economics Foundation and Research for Action – says that almost half of the poorest households are now using credit cards for everyday living costs and food.
According to @theFCA "…caps won’t always deliver the right outcomes for consumers. That is why we take an evidence based approach, tailoring how we intervene to the issue." But it has not conducted any analysis of how caps work vis a vis its other measures. So how does it know?
— Responsible Credit (@responsiblecred) July 9, 2019
And with many still paying more than £2 for every £1 borrowed, it is leaving the most vulnerable drowning in debt.
This is despite new measures introduced by the FCA last year to “curb persistent credit card debt”, according to the coalition’s Regulating the credit card market: why we need a cap on costs report.