Quite often when it comes to debt recovery, the people who default on payments and get themselves into all sorts of hot water owing money to various companies are the ones getting themselves into debt on credit cards.
While credit cards offer an effective way to spread costs over a period of time in sensible hands, there will always be those who see credit cards as a way to gain easy money. These people often overstretch themselves by just paying the minimum payment each month, even though the debt is unlikely to be paid for several years, if ever.
The Financial Conduct Authority has set out to highlight the amount of customers who only make the minimum payment each month and get themselves into persistent debt as a result. The credit card companies do little to tackle the issue because it is precisely these customers who are the most profitable.
Out of the 34 million credit card holders in the UK, 1.6 million only make the minimum payment and 2 million people have defaulted or in arrears with their cards. Unless the credit card companies are prepared to act as swiftly as they do when payments are missed then it is unlikely that the numbers of people in persistent debt with their cards will fall any time soon.