Credit card providers are to begin sharing detailed information about their customers in a bid to identify those who are struggling to repay their debts, it has been reported. According to the Guardian, the 17 credit card companies belonging to the UK payments association Apacs will exchange in-depth details about consumers’ repayment habits.
Currently, information such as how much customers are borrowing and whether they are making their repayments on time is shared, but under the new proposals companies would have access to additional details.
These would include the actual amounts being repaid each month and whether customers are using their cards to withdraw cash. Both of these are seen by Apacs as signs that consumers are struggling.
The organization claims four percent of the nation’s credit card holders are facing financial problems, while 11 percent are paying just their minimum monthly repayments, risking further debt problems.
Apacs hopes the scheme – which forms part of a wider responsible lending initiative – will be in place by the end of this year, covering 97 percent of the UK credit card industry.
A study by researchers at the University of Warwick has revealed that the presence of a minimum repayment level on a credit card can act as a disincentive to pay off the balance in full, effectively extending the length of the debt.
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