2014年-FCA英国金融行为监管局_ms14_6_1_32页_664kb

Credit Card Market Study Summary

Core Content

This document outlines the FCA's market study on the credit card market, conducted in 2014. The study aims to understand how the credit card market functions and identify any issues that may affect consumer interests. It sets out the scope of the study, the objectives, and invites stakeholder feedback on the proposed areas of focus.

Main Objectives

The FCA aims to:

• Assess whether effective competition exists in the credit card market and how consumers drive it through shopping around and switching.
• Examine how firms recover costs across different customer groups and the market impact of these cost recovery mechanisms.
• Investigate the extent of unaffordable credit card debt, including whether consumers are over-borrowing or under-repaying and whether firms have incentives to provide unaffordable lending.

Key Findings and Concerns

The FCA identified several key concerns in the credit card market:

• Consumer Understanding: Many consumers lack a full understanding of how to manage their credit card spending in a sustainable way.
• Shopping Behavior: Consumers often focus on only a few features (e.g., 0% balance transfers, APR) when selecting a card, potentially overlooking the overall value for money.
• Over-Borrowing and Under-Repayment: Some consumers may be taking on too much debt or not repaying adequately, which can lead to financial distress.
• Interest Charges: Consumers paying interest on balances may be paying more than they expect or subsidizing free users.
• Revolving Credit: There is a concern that revolving credit (where balances are carried over) is not always in the best interest of consumers.
• Firm Incentives: Firms may have incentives to offer unaffordable lending, especially to higher risk borrowers, which could lead to consumer detriment.

Market Overview

• The UK credit card market is one of the largest areas of unsecured lending under FCA regulation.
• As of 2014, there were around 30 million credit card consumers, with an estimated £56.9 billion in outstanding balances.
• Credit card usage is higher in the UK compared to the rest of Europe, with over 70% of EU credit cards held by British consumers.
• Interest rates have been steadily increasing since 2009, following a long-term decline.
• Transactors (who pay off balances in full) make up 61% of cardholders, while revolvers (who carry balances over) make up 39%, including 11% partial payers and 6% minimum payers.

Regulatory and Market Context

• The regulatory framework includes the Consumer Credit Act 1974, the Consumer Credit Directive, and the Financial Services and Markets Act 2000.
• The Payment Systems Regulator (PSR) is expected to regulate interchange fees and card payment systems, which will be considered only in terms of their implications on the market.
• The market is not highly concentrated, with 33 credit card issuers and over 200 products available.
• New entrants face some barriers, but entry rates have been reasonable, with 18% share of new business captured by new entrants between 2000 and 2010.

Scope of the Market Study

The study will focus on retail credit card services provided by banks, mono-line issuers, and their affinity/co-brand partners. It will cover:

Areas of Focus

• Consumer behavior and how it affects competition.
• Firm cost recovery and its impact on market dynamics.
• Unaffordable credit card debt and whether it leads to consumer harm.

Considered but Not Focused

• Other payment mechanisms (e.g., debit cards, online/mobile payments).
• Other unsecured lending (e.g., personal loans, overdrafts).
• Card schemes and issuer services.
• Interchange fees, but only in terms of their implications on the market.

Excluded Areas

• Business credit card services for SMEs and corporates.
• Charge cards and store cards, due to their limited scope and different characteristics compared to standard credit cards.

Next Steps

• The FCA invites stakeholders to provide feedback on the scope of the study by 5 January 2015.
• The study will engage with industry stakeholders, consumers, and representative bodies to gather evidence.
• The findings will be used to assess potential actions and remedies to improve the market.

Conclusion

The study is not a conclusion but a starting point to better understand the market and address any concerns related to consumer protection, market integrity, and effective competition. The FCA is committed to exploring all themes and is open to stakeholder input on the issues raised.