Fall in credit card minimum repayments ‘could cost more’

13 October 2008

Changes to the minimum repayments credit card customers are expected to pay could end up costing them more in the long run, and potentially result in long-standing debts, the Mail Online has warned.

As turmoil in the economy takes its toll on consumers, a number of credit card companies have lowered their compulsory minimum repayment levels, in a move that may ease the burden of credit card debts for some customers. However, this could also lead to customers incurring more interest in the long term, as well as greatly extending the time they need to repay the debt if they only make the minimum repayments.

A spokesperson for debt management company Gregory Pennington said: “Lower minimum credit card repayments may benefit customers in the short term, but in the long term they could end up paying a lot more, since there will be more time for interest to build up.

“In terms of debt management, it’s generally a better idea for anyone with large credit card debts to tackle the issue head on, which could prevent a lot of problems in the long run.

“There are a number of debt solutions available to people with credit card debts, such as debt management plans and debt consolidation. We advise anyone who is struggling with credit card debts to seek professional debt advice as soon as possible.”

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Gregory Pennington are experts in debt management and debt advice. If you are worried about your debts, don’t hesitate to contact one of our debt advisers today.

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Gregory Pennington are founder members of DEMSA (Debt Managers Standards Association).

DEMSA are the first trade body within the finance industry to successfully secure approval for its code of practice under the OFT Consumer Codes Approval Scheme (CCAS).