Persistent Debt new Credit Card Rules


Following on from this article

https://www.moneysavingexpert.com/news/cards/2018/02/new-credit-card-rules-to-help-those-in-persistent-debt

the new rules on persistent debt are now fully in force as from today.

https://www.fca.org.uk/news/press-releases/new-credit-card-rules-introduced-fca

This probably explains all the begging letters poeple have been receiving about increase in minimum payments recently.

Also, banks should now look at whether the cardholder is racking up interest and paying off little capital and possibly – I say possibly because I think they will take the view why should they lose profits – close the card facilities and offer cardholder a loan at a lower interest rate than the card.

This begs the questions:

1. If the cardholder cannot afford the current minimum card payments, how will they be able to afford the higher loan payments?

2. Will such loans, if offered, simply be an excuse to push the cardholder deeper into debt by consolidating existing debt, thus allowing the cardholder to continue racking up debt?

3. If cardholder has multiple cards carrying balances on which minimum payments are being made and a loan is made to clear each one, will we be seeing a vast increase in bankruptcy as a result of debtors being unable to meet the payment schedules set out?

4. If banks and other lenders face having their profits curtailed by such measures, will we see the end of free bank accounts and the like as banks etc try to appease their shareholders by making up thier lost profits from other sources?



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