Credit card customers face income shock, says FSA
11 March 2010 13:53:03
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| Report warns credit card customers about slow economic recovery. |
The Financial Services Authority (FSA) has published a new report warning households about the dangers that will arise if the pace of economic recovery is slower than expected.
FSA chairman Lord Adair Turner explained that shock interest rate rises, an increase in unemployment or further property price falls could all heap further pressure on struggling consumers.
He told the Daily Mail: "This recession is really quite different than the early 1990s. We have households which are more indebted than they were in the past and that creates a vulnerability."
The report noted that mortgage holders have failed to take the opportunity to pay off credit card debts in the past 12 months, during which the Bank of England base rate has been at a historic low of 0.5%.
Earlier this week, the government's Scottish affairs committee criticised credit card providers in Scotland for engaging in "unacceptable practices" during the recession.
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