Millions of people languishing in credit card debt could see their charges eased or withdrawn under proposals outlined by the financial watchdog.
The Financial Conduct Authority (FCA) has announced a raft of measures to help people in persistent credit card debt, including waiving or cancelling interest and charges if customers cannot afford to curb their liabilities through a repayment plan.
It found that 3.3 million people have fallen into a persistent credit card debt spiral, where they are forking out more on interest and charges over 18 months than they have spent on paying back their borrowing.
Andrew Bailey, chief executive of the FCA, said credit card companies are reluctant to intervene to help these customers because they are profitable business.
"Credit cards can be a very effective product for consumers, but a significant minority of customers experience real difficulties," he said.
"We expect our proposals to reduce the number of customers in problem credit card debt, as well as putting customers in greater control of their borrowing.
"Persistent debt can be very expensive - costing customers on average around £2.50 for every £1 repaid - and can obscure underlying financial problems.
"Because these customers remain profitable, firms have few incentives to intervene.
"We want to change this situation so that firms and customers will deal with outstanding debt more quickly, and avoid persistent debt in the first place."
The proposals drawn up by the FCA would force firms to contact customers and ask them to make faster repayments if they are struggling with persistent debt.
Those customers that remain in debt for another year-and-a-half would then be put on a repayment plan.
However, customers could have their card suspended if they fail to respond, or can make the repayments but refuse to do so, the watchdog said.
Credit card holders that cannot afford any of the options would be offered even greater help from firms, such as cutting or waving their interest or charges.
The FCA, which is expecting feedback on the proposals by July 3, said it could help customers save between £3 billion and £13 billion by 2030 by helping them make faster repayments.
It comes after the watchdog became concerned about the "scale, extent and nature" of the credit card debt problem following a market study.
Mr Bailey added: "The measures that we're proposing today, alongside those already announced, are part of a package of significant improvements for credit card customers based on the comprehensive analysis of the market that we have carried out."
Alongside these measures, the watchdog has also revealed proposals to make companies use their data to intervene early to help customers in financial difficulty.
It said it had also struck a voluntary agreement with the industry to allow customers take charge - or decline - increases to their credit limit.
Susan Kramer, Liberal Democrat shadow chancellor, said: "The Liberal Democrats have been campaigning for years for a fairer system for those struggling with debt.
"Finally, after endless pressure, the FCA seems to be taking some action.
"These new measures will help tackle the abuse of credit card customers tempted into debt they cannot afford.
"Ensuring credit card companies can work with customers trapped in debt is a fairer system for both parties.
"It is time to finally put an end to this issue."