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8 January 2020, 13:03
New credit card rules will mean that customers who only make minimum repayments are at risk of having their cards suspended.
Brits are at risk of having their credit cards suspended if they only make minimum repayments under new rules by the financial regulator.
As of September 2018, card companies started to notify customers who had only made minimum repayments on their cards for 18 months.
Companies were then given 18 months to convince customers to increase the amount they were repaying by sending them letters. This move by the Financial Conduct Authority (FCA) aims to prevent people from getting into a lifetime of debt by only making minimum repayments.
This 36 month period comes to an end this February, meaning customers who have failed to respond to the companies and up their repayments are at risk of having their accounts closed.
The FCA has said that people who make minimum repayments pay an average of £2.50 per £1 they pay back, and they claim that this move could save consumers up to £1.3billion a year.
However, The Sun reports that debt charity StepChange has warned that the new rules could see Brits lose their credit cards when they need them most.
A spokesperson for UK Finance told the publication: "The FCA’s new persistent debt rules are designed to reduce the cost of borrowing by encouraging customers to pay back their credit card balance quicker, where they can afford to do so.
"There are some circumstances where the new rules require the credit card provider to suspend the card, for example if a customer does not respond or a suitable repayment option is not agreed, so it is really important that customers do not ignore any letters received.
"Read any correspondence carefully and contact your credit card provider to understand your options."