Credit Card News Uswitch Wants 3percent Minimum Repayment 17385366
Uswitch wants 3% minimum repayment
26 July 2006
UK credit card debts current stand at over £50 billion and analysts argue that part of the reason for this is consumer’s lethargy over repaying their outstanding debts.
Nick White, head of personal finance at Uswitch.com, claims that if the minimum repayment on credit cards was raised by just one per cent, consumers could cut their interest payments by more than half over the course of their debt.
“[As personal debt has risen] lenders have simultaneously become less stringent about their repayment requirements,” he said.
“By reducing the minimum repayments to a level that makes credit cards seem more affordable and allowing customers to repay smaller amounts each month, borrowers are retaining their debt over a much longer time frame and paying more interest.”
Mr White claimed that setting a raised minimum repayment would be a step in the right direction for an industry which has come under scrutiny recently for its irresponsible lending practises.
“To help prevent this debt cycle and promote both responsible lending and borrowing, we are calling on the industry to enforce a three per cent floor on the minimum repayment requirement set by all providers.”
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