The Financial Conduct Authority (FCA) has announced its decision to run a competition review into the UK’s credit card industry.
The regulator says it’ll focus on how it deals with those who are already in financial difficulty, in particular.
30m people hold at least one credit card in the UK, with 56m credit cards in issue.
In fact, according to a UK card association, 70 per cent of all European credit cards are held by Britons.
Last year, gross spend on those cards reached £150bn, with £57bn in outstanding balances.
According to research cited by the FCA, 9m Britons are considered to be in serious debt, with a number labelled as “survival borrowers”, who feel they have no option but to borrow money.
Martin Wheatley, chief executive of the FCA, said:
There are some obvious questions and challenges here for regulators and industry: why are card issuers providing the means, in some cases, for the most indebted consumers to escalate their way into further debt?
As part of this review, or market study as we call it, we will be engaging with the industry ahead of time and it’s important to say there’s no pre-determined terms of reference, outcome or agenda here.