Five questions on: Credit cards crackdown

Who's cracking down on credit cards?

The Financial Conduct Authority launched a review of the market on Tuesday after expressing concerns that credit cards are being marketed too aggressively, pushing consumers into running up debts that they can't afford to repay.

What will the study examine?

The review, which runs until January, will examine how easy it is to shop around and understand terms and conditions. It will also investigate whether certain groups are disadvantaged or over-borrowing, and whether consumers can switch easily between different card providers.

Are cards being marketed too aggressively?

There is certainly a battle among plastic companies to attract new customers. It's chiefly being fought through long-term 0 per cent deals. Now you can get almost three years' worth of interest-free credit. However, research by the University of Bristol's Personal Finance Research Centre showed that interest-free deals can lure some consumers into spending more than they can afford. And that can lead to people being trapped in a spiral of debt.

How much do we owe on cards?

There are about 30 million cardholders with a total of £56.9bn in outstanding debt, although with many people holding two to three cards, the debt is more concentrated. In fact, the average total credit card debt of clients of the StepChange debt charity is £9,047, it said. The average person who turns to the charity has multiple plastic, with 2.7 cards.

So there is a problem?

There certainly is. Mike O'Connor of StepChange said: "Too many people are using credit as a safety net when all too often it is a trap which leads to problem debt." With card companies promoting plastic as an easy way to pay, many more will be suckered into unmanageable debt.