The financial watchdog has called for lenders to step in earlier when handling customers unable to make more than the minimum repayments on credit card debt.
The Financial Conduct Authority (FCA) said around 3.3m people were stuck in "persistent debt", where they have shelled out more in interest and charges than they have repaid of their borrowing over 18 months.
These customers are profitable for the companies who do not "routinely intervene" to help them, according to the FCA.
Following a thorough study of the market, it has set out proposals to make lenders take steps to help customers repay their balances more quickly and offer greater assistance to those who can't.
It wants firms to prompt customers to make faster repayments if they can afford to do so, when a customer has been in persistent debt for 18 months. Another measure outlined by the FCA involved card firms helping such customers by coming up with a repayment plan.
At other times, they may have to reduce, waive or cancel any interest or charges to help progress the customers out of debt, the watchdog advised.
The FCA said the steps will help save customers between £3bn and £13bn by 2030.
Andrew Bailey, the FCA's chief executive, said: “Credit cards can be a very effective product for consumers, but a significant minority of customers experience real difficulties. We expect our proposals to reduce the number of customers in problem credit card debt, as well as putting customers in greater control of their borrowing.
"Persistent debt can be very expensive - costing customers on average around £2.50 for every £1 repaid - and can obscure underlying financial problems. Because these customers remain profitable, firms have few incentives to intervene."
We want to change this situation so that firms and customers will deal with outstanding debt more quickly, and avoid persistent debt in the first place.
The regulator has launched a consultation paper that closes on 3 July.