The Financial Conduct Authority (FCA) has outlined its latest plans to tackle the financial strain faced by the hundreds of thousands of people who utilise high interest lenders and rent-to-own companies, or have unarranged overdrafts.
According to the FCA, financial firms made £2.3 billion in revenue from overdrafts in 2016, with 30 per cent of the total coming from the fees imposed on people who have exceeded the agreed limit.
It’s also estimated around 400,000 people have outstanding debts with rent-to-own companies such as BrightHouse, paying hundreds of pounds on top of the original product’s shelf price over several years.
The more that can be done to help those who feel forced to borrow from high-interest lenders or rent-to-own companies, the better.
But it’s important to prevent people amassing large debts to begin with, by promoting the fair, affordable alternatives available through credit unions.
By making your local credit union, CLEVR Money, the first place you come to for credit, you really can’t lose. As part of our ‘Beat the banks’ promise, if a high street bank offers you a lower rate on a loan under £5,000, we’ll match it.
Don’t forget, borrowing and saving through a credit union means you’re helping to give something back to the local community too.