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Three years to clear your card debts

Shake-up: The Financial Conduct Authority is introducing new rules to protect borrowers

Up to four million credit card customers face having their cards stopped and black marks put on their credit file if they only make minimum repayments.

City watchdog the Financial Conduct Authority is introducing new rules to protect millions of borrowers who struggle with debt. 

Under the shake-up, banks will be obliged to contact customers who are making little inroad into their balances after 18 months, telling them to increase their repayments.

Borrowers who only make the minimum repayments on their cards for three years face having their cards suspended to stop them racking up more debt.

At this point, banks may inform credit reference agencies and set up a repayment plan, which could involve reducing or wiping interest and charges.

Banks have agreed to allow customers to opt-out of receiving automatic credit increases under the voluntary pact with the regulator.

The Financial Conduct Authority estimates that the new rules save customers between £310 million and £1.3 billion a year in charges.

r.lythe@dailymail.co.uk

 



Read more at DailyMail.co.uk


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