Recent allegations have been made that numerous credit card companies have been lowering the amount of the minimum repayment owed each month. Barclaycard is one of the companies accused of this. In the last month Barclaycard has reduced the minimum payment from 2.25 percent to 1.5 percent of the credit card balance. Though consumers are angered over this change, it does not have to affect you.
The credit card companies realise several individuals are suffering from job loss, cut hours, and increased tightening on the monthly budget. Rather than have consumers forgo a payment due to their inability to pay they are trying to make it easier for struggling families to make payments to their debts. If a consumer takes the company up on this lowered minimum payment they could spend as much as 5000 pounds more over time on the credit card debt they have due to current interest rates and the average credit card balance. A lowered payment could take up to 31 years to pay off if just the minimum payments are made.
Having stated that, consumers do not have to pay the minimum payment. In fact it is always advisable that the card holder pay more than the minimum payment when they can afford it to lower the interest they will pay.
For consumers who have been paying 50 pounds a month, they can continue to do so, even if the repayment is lowered to 33 pounds a month. The point is not to extend the amount of money the credit card companies will earn, but instead to make it easier for some individuals to make the payments they have not been able to in the last few months.
There are a rising number of rejections for balance transfer credit cards being awarded, which further makes things difficult on those who are struggling.