(PRWEB) April 12, 2006
Recent figures released by Banks and credit companies show that credit card bad debt increased by over 20% from last year (2005)
Consumers are advised not to continually keep to the required minimum payment set out by their credit card supplier, but instead, try and increase their repayments; however, many are ignoring this sound advice.
Credit card minimum payments are often as low as 2% of the outstanding balance. It is calculated that a debt of £3000 with a credit card at 15.9% APR and keeping to the minimum payment required of 2% would take over 36 years to repay with the interest charged at £5,256.76.
If the minimum payment required were increased to 5%, the same outstanding debt would take just over 9 years to be repaid with the interest charged reducing to £993.19.
While the banks react to their exposure to bad debt by reducing credit limits and tightening up on credit card application acceptances, more can be done to help consumers who unwittingly find they are getting further into a debt that is unable to be repaid.
Peter Kenny, the owner of Credit Cards GB, said, “By increasing the minimum repayment required to 5%, banks and credit companies will be assisting consumers who ignore popular advice by keeping to minimum repayments. Debts will be able to be repaid much earlier than before. We always advise consumers to not restrict themselves to minimum payments and that by paying as little as an extra £10 per month would have a positive effect on their longer term finances.”
Current minimum repayment requirements from credit card companies include:
Egg – 2%
MBNA – 2.25%
Lloyds TSB – 2%
HSBC – 3%
Co-operative Bank – 2%
Royal Bank Of Scotland – 2.25%
HBOS – 2%
Credit Cards GB offers unbiased credit card reviews and information on balance transfers (http://www.creditcards-gb.co.uk ), as well as advice and up to the minute credit card news. Founded by Peter Kenny, Credit Cards GB is quickly building its reputation as one of the most respected sites in the UK credit card market.
Further information on: credit cards UK (http://www.creditcards-gb.co.uk) or credit card advice (http://www.creditcards-gb.co.uk/creditcardadvice.html)
Glasgow G1 5DR
Telephone: 0141 552 8888