Credit card customers struggling with persistent debt could save up to £1.3 billion a year under new proposals from the Financial Conduct Authority (FCA).
The regulator is continuing its research into the market as it has concerns about the size and scale of credit card debt in the UK.
The FCA first published its proposals for the industry in April 2017, when it suggested that struggling customers should be given better support from banks.
This included forcing providers to work with customers to agree repayment plans and, in the most serious cases, reducing or cancelling charges and interest.
It says the industry response has been overwhelmingly positive and now estimates that these proposals would save consumers between £310 million and £1.3 billion per year.
This is because the new rules would reduce the average interest paid by customers. At present those with persistent debt end up paying charges worth 2.5 times the amount they have repaid.
The FCA is now seeking further feedback before formally introducing the rules as early as possible next year.
Andrew Bailey, FCA chief executive, says: “The proposals we are introducing will save consumers billions of pounds by reducing longer-term borrowing on credit cards, which can be very expensive and can hide real financial hardship. We remain committed to action to protect consumers in the credit card market as soon as possible.”