Research conducted by the New Economics Foundation (NEF) think tank has revealed that credit card debt is becoming unmanageable as 40% of British adults are struggling to make it to payday, 31% of whom say it’s due to credit card repayments.
Data from the Financial Conduct Authority (FCA), R3 and NEF’s own modelling revealed that out of the 41% of those worried about their debt levels, 50% are specifically concerned regarding credit card debt.
Furthermore, a recent survey by the FCA found that 52% of people who own credit cards are potentially vulnerable as they might not have the required backup for situations such as health problem or job loss.
According to a modelling of NEF and the Centre for Responsible Credit, the number of British consumers paying more for their credit card debt is increasing.
To address such concerns, Walthamstow MP Stella Creasy is calling for a 100% cap on credit cards to protect the customers.
Creasy said: “Millions of people are ‘zombie debtors’ – paying the interest but not the capital off on their credit cards – and two million more are in arrears. With the FCA data itself showing five million of us will take ten years or more to clear our credit cards, there is a simple principle at stake – why do we cap payday loans to disrupt these spirals of debt but leave millions facing exactly the same problems of being stuck in a debt trap with credit cards?
“If the FCA is timid on this, then the Government should act and bring in legislation to require them to cap credit cards too and protect millions of consumers.”