FCA publishes final findings of credit card market study

The Financial Conduct Authority (FCA) has today published the final findings of its study of the credit card market, 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 proposes to take forward a package of remedies that will enable consumers to shop around more effectively, budget more efficiently and – where appropriate – repay debt faster. For consumers in problem credit card debt, the FCA is proposing further action so firms address this specific issue and contact consumers before they get into financial difficulties.

The final findings report follows the interim report published last year, which found that although competition worked fairly well for most consumers, there was concern about the scale of potentially problematic debt.

The FCA carried out further analysis on consumers in problem credit card debt. This analysis has reinforced the FCA’s concerns on those consumers who are carrying a significant level of credit card debt for a long period. The analysis suggests that firms do not have strong incentives to help customers out of persistent credit card debt.

Some of these remedies will be delivered through FCA rules, subject to consultation; others through industry voluntary agreements or taken forward through supervisory work. Some measures will require behavioural trials. 

Industry-led actions will include:

  • timely prompts before promotional periods end
  • timely information to prompt consumers to take into account how much they are borrowing and avoid over limit charges, and
  • giving consumers the ability to choose the payment due date

Christopher Woolard, Director of Strategy and Competition at the FCA, said:

‘Our final findings show that competition is working fairly well for most consumers, with firms competing strongly for custom, and the market offering a range of products to meet consumers’ needs.

‘However, we remain concerned about persistent and potentially problematic credit card debt. We will continue to work closely with consumer groups and industry to deliver changes to help consumers gain more control over their finances.’

The FCA will publish further information on proposed rules and voluntary remedies later in the year.

Notes to editors

  1. Read the Credit card market study: final findings report

  2. Read the Credit card market study: interim report
  3. On 7 April 2014, the FCA published research on the credit card market. Market studies enable the FCA to take a holistic look at competition in a market, assessing how consumers and firms behave and interact.
  4. On 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
  5. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
  6. Find out more information about the FCA.