The U.K. Financial Conduct Authority estimates that credit card customers will save between £310 million and £1.3 billion a year in lower interest changes under new rules.
The changes, which come into effect March 1, were designed to provide more protection for credit card holders in persistent debt or at financial risk, with the FCA analyzing the accounts of 34 million customers over a period of five years and surveying nearly 40,000 customers.
Under the new rules, firms will be required to assist people that are making low repayments over a long period. Companies will have to contact consumers who have been in persistent debt for more than 18 months, warning them that if they do not change their repayment pattern that their card may ultimately be suspended. For those customers who have been in persistent debt for 36 months, firms will have to offer them a way to repay their balance in a reasonable period.
The FCA noted that firms will have until Sept. 1 to comply with the new rules, or potentially face regulatory action.