This week the FCA called for a shake up in the status quo after findings suggested millions of customers are failing to use credit cards to their best interest.

While we’re confident the conclusions will merely re-affirm what you already knew, the scale of the problem actually surpassed our own estimations. For over 5 million customers, it was estimated it would take them more than 10 years to repay their credit card balance. Further to this, 1.4 million customers were found to have consistently paid the minimum repayment for 3 years in a row.

As you will know, outside of initial introductory offers, credit card interest rates are usually between 17% and 20%. The behaviour trends revealed in the report suggests that many customers will be stuck with their debt for much longer than they had perhaps planned. For example, if only paying minimum repayments of £30 per month, a £2000 balance at 17% would take a total of 206 months to repay. That’s 17 years of debt at a cost of £4180!

These findings have prompted the FCA to explore rule changes that could help improve customer awareness and avoid potentially problematic debt. While it’s positive to hear that changes are afoot, where it’s in the best interest of the customer, we’re keen to make sure we continue to help clients consolidate their credit card debt using second mortgages.

Remember these statistics will include your clients but they may not know that you can help, or may be too embarrassed to broach the subject with you. That is why it is important that you make them aware you have a suite of products that may be able to alleviate the short term pressure on their monthly budget while making their debt finite in terms of term. A huge percentage of the population is faced with credit card equations that don’t read in their best interest, or repayment commitments that present a burden that is too heavy on their monthly expenditure so perhaps we can team up. This can be especially true for those “tricky to place” clients. Whether they’re retired, self-employed or have adverse credit, we can help match them to a suitable second mortgage product with interest rates as low as 4.43% (dependent on individual circumstances).

To find out more about how debt consolidation using second mortgages could help your clients, email us at introducers@loan.co.uk, or give our team a call on 0345 450 4678.