Cash point

City watchdog the Financial Conduct Authority has finally announced new rules for credit card firms.

A five-year study found huge numbers of people are trapped in persistent debt, paying £2.50 in interest for every £1 they borrow.

But the changes could be too little and too late for many. They don’t properly address the problems of extortionate interest rates and the fact that minimum repayments aren’t sufficient to clear debts, but simply fill the coffers of card firms.

Only after 18 months, where a customer has been paying more interest, fees and charges than the amount they have repaid, do the rules kick in.

Firms then have to explain the benefits of increasing repayments. After 27 months they must make contact again.

The vast majority of people just paying the minimum each month will remain trapped in a debt cycle.

After 36 months, firms have to offer options to repay balances quicker. This leaves people struggling for three years, allowing card firms to continue to cash in.

Don’t get stung with excessive credit card interest and fees.

Try to pay above the minimum each month. Just £10 more will help to clear your balance quicker and cheaper.