Government credit card and store card crackdown
By Mike Ashworth | January 18, 2010
The Government’s proposing a credit card crackdown, on minimum repayments, allocation of payments, unsolicited credit limits and more. You can read more about it here
Today, I read an article on the Money Saving Expert website which shared their views on the crackdown.
One of the the most amazing things is about minimum repayments on credit and store cards.
The current warning shown on many statements states…
“If you only make the minimum repayment each month, it will take you longer and cost you more to clear your balance” is paltry.
‘Longer’ and ‘more’ does not convey enough information to enable a consumer to make an informed decision.”
An example would be as follows…..
If a consumer only makes the minimum repayments, usually 2%, on a typical 17.9% credit card, for a £3,000 balance, it takes 41 years to repay, costing £6,300 in interest.
To put it in context, a twenty five year old doing this would be retired before it was repaid.
Shocking!
Topics: Finance |
2:54 pm on January 18th, 2010
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