Britain's financial watchdog has expressed concerns about the scale of potentially problematic credit card debt and claims more could be done to help struggling borrowers.

While consumers in default are "extremely unprofitable" for lenders, the watchdog noted that those with persistent levels of debt or who make minimum payments are profitable, and firms "therefore have fewer incentives to help these customers".

Two million credit cardholders are currently in arrears or have defaulted, according to the Financial Conduct Authority (FCA).

It estimates that a further two million people are in persistent levels of debt that some may be struggling to repay, and a further 1.6 million people only make the minimum payments on their debt each month.

Bradford-based debt counselling charity Christians Against Poverty (CAP) has been assisting people in financial crisis in the city for nearly 20 years.

The charity now has three debt centres in operation in the Bradford area as well as its headquarters, in North Street, supporting a network of 290 centres which help people across the UK.

“If you know you’re slipping behind, only ever to pay the minimum on your credit cards, you need to do something fast because debt problems soon spiral,” says a CAP spokesman.

“Don’t wait to see how bad things get before you get help with debts. If you’re behind with your credit card, it’s very likely you’re behind in other areas too like rent and bills. Brand new research we’ve just done shows 43 per cent of CAP clients in Yorkshire borrowed from credit cards, second only to borrowing from friends and family which was the most popular form of borrowing both locally and across the country."

She add: "CAP negotiates with all the creditors on each client’s behalf, something many people are feel powerless to do on their own. “

Javed Ashraf from Holme Wood Advice Centre at Holme Wood Christian Community (HCC), says that in the 25 years he has worked there he has never seen such levels of poverty, with between 30 and 40 per cent of people having debt issues, including credit card and store card debt.

“There are various options depending upon people’s circumstances. It could be that they need a debt management plan, or bankruptcy may be an option, or a Debt Relief Order (DRO) or Individual Voluntary Arrangement (IVA). We look at what is best for the individual.”

He said that centres such as HCC offer free advice.

Craig Gedey, managing director of Crosshills-based Dept Advisory Line - a commercial advice service - points out that people may not be managing their money correctly and by learning to do so, could improve their situation.

“Our customers almost all have credit card debt. If you are making the minimum payment every month or continually doing balance transfers or using credit to pay off debts that is a sign that you should seek advice.”

Christopher Woolard, director of strategy and competition at the FCA, said more could be done to help the "significant minority" struggling with their credit card debt.

"This is a really important market in the UK. Around 60% of adults have at least one credit card, and there is an estimated £61 billion in outstanding balances," he said.

"Our study suggests that the market is working reasonably well for most consumers, with a range of cards on offer. However, for a significant minority who are in persistent levels of debt, the market could potentially work better."

The watchdog also called for the market to provide better information for those shopping around, and ensure borrowers can search the market without damaging their credit score.

The FCA’sfinal report on credit card debt will be published in spring 2016.

Responding to the report, Money Advice Trust chief executive Joanna Elson claimed the FCA was "absolutely right" to be concerned about borrowers repaying only the minimum amount. She called for such borrowers to be treated the same as those who actually miss payments.

"As the report highlights, credit card companies usually intervene effectively to help customers who begin to miss payments.

"A more consistent similar approach to customers who are routinely making minimum payments would be enormously beneficial.

"With borrowing on credit cards rising by around £300 million a month and household budgets likely to come under further pressure from rising rents and interest rate rises, now is the time to address this problem."

*For people who want to re-organise their finances but don’t feel in crisis, there are also free sessions called the CAP Money Course and these are available at Sunbridge Road Mission, Hope House, starting tonight at 7pm. capuk.org/capmoneycourse; 0800 328 0006.”