The FCA has published the final report on its credit card market study and set out a package of measures, which include a series of industry led proposals, to help consumers take better control of their spending. The FCA has confirmed that competition is working fairly well for most consumers and that competition is focused primarily on certain product features such as introductory promotional offers and rewards. However, the FCA has found that there is less competitive pressure on interest rates outside promotional offers and other fees and charges. The FCA found that consumers in the higher risk segment have a more limited choice of products and providers and that by further analysing potentially problematic debt, the FCA’s concerns have increased about the scale, extent and nature of problem credit card debt and firms’ incentives to manage this.

The FCA has developed a package of remedies, to include a combination of, where appropriate, FCA rules and guidance, and some industry agreements. Industry-led actions will include timely prompts before the end of promotional periods, information to encourage consumers to take account of how much they are borrowing and avoid over limit charges, and giving consumers the ability to choose the payment due date. The FCA will monitor the success of industry agreements over time, and if they are not effective, will consider further action. The FCA will publish further information on proposed rules and voluntary remedies later in 2016.

View FCA final report on credit card market study, 26 July 2016