The UK’s Financial Conduct Authority (FCA) has today published its interim findings into the credit card market. Frontier (Europe) has been supporting Lloyds Banking Group as part of the study.

To inform its findings, the FCA analysed five years of data on the accounts for some 34 million credit card consumers in the UK and surveyed around 40,000 consumers about their behaviour and expectations. Their interim findings show that:

• consumers shop around, switch and value the flexibility offered by credit cards;
• firms compete strongly on some features and offer a range of products to meet consumers’ needs;
• firms do not target particular groups of consumers to cross-subsidise other groups; and that
• there have been new entrants into the market in recent years.

Given these findings, remedies will focus on supporting consumers that have persistent levels of credit card debt. They include measures to give consumers more control over credit limits and efforts to encourage consumers to pay down debt when it is practicable for them to do so.The FCA’s final report is expected to be published in early 2016.

Frontier (Europe) regularly advises financial services providers on economics, financial and regulatory strategy and behavioural economics.

For more information, please contact Goran Serdarevic on g.serdarevic@frontier-economics.com, or call +44 (0)20 7031 7000.