Nic Murray, Research Officer, Money and Mental Health

What the FCA credit card market study means for mental health

What’s the credit limit on your credit card? Don’t know? You’re not alone.


For many people with mental health problems – and others – the current system puts them at risk of spending more than they can afford and getting into unsustainable debt.

Take two of the comments from members of our Research Panel:


“[My credit] limit just seems to keep on going up. When I am manic I just spend & spend.”


“Due to depression and anxiety it is very difficult at times to deal with contacting companies.”


That’s why, at Money and Mental Health, we’re pleased the Financial Conduct Authority is consulting on new rules to stop companies from putting your limit up without you asking them to do so, and to ensure they send text notifications if you’re close to your limit.

This consultation is part of a wider credit card market study, that has been criticised by some – and it’s certainly a shame it’s taken so long to tackle this risky practice by credit card providers.


Why does this matter?
A 2015 report from the Debt Advisory Centre suggested that as many as 15 million credit card holders in the UK had their credit limit increased in the previous year without them requesting this. For many cardholders this may not be an issue – they may spend only what they can afford, and they may feel confident to call and ask for their limit to be reduced.

But many people have have told us when they are unwell they find contacting financial providers to complete tasks like this much more difficult and are often unable to do so due to the stress and anxiety they bring.

This means that some may be left with a higher credit limit than they would wish, which can often serve as an unavoidable temptation when unwell. Increased spending has been highlighted as a very common issue, with people telling us that if there is money available to them they will spend it until it’s gone.


“When I am feeling unwell it’s like I lose all sense of reality. I’m living and breathing someone’s else’s air, spending someone else’s money.”


Our research also identified that many people find staying on top of financial management harder in periods of poor mental health. Over half of the five and a half thousand people we spoke to for our Money on your Mind report told us that they have been behind with bills in the last year, with 67% saying it was due to difficulty managing money.

Many respondents described themselves as being in a state of denial about their finances when they’re unwell, or disengaging completely. We believe the proposal to introduce text alerts as you near your credit limit could be one way to support those who are struggling to engage with financial management to avoid greater financial harm.


“I don’t want to avoid reality, but it’s too stressful to think about.”


Let us know what you think
We believe it is important to ensure that the voices of those with mental health problems are heard to ensure that the credit card market best accounts for their needs. Money and Mental Health intend to contribute to the FCA’s ongoing consultation, making sure that those with mental health problems, and all others, can benefit from any tools and regulation to support the everyday use of credit cards.

If you have any feedback on this report please let us know, or if you want to help contribute to the consultation you can share your story and ideas with us by joining our research panel.