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Some cardholders could spend more than a lifetime paying their credit card debt

August 7, 2009 by admin  
Filed under News, News-Credit-Cards

1 Comment

Concerns have been expressed recently that some credit card holders who are customers of the credit card giant Barclaycard could end up spending more than their lifetime trying to repay their credit card balance, after the credit card company announced that it was planning to reduce the minimum level of repayment that it was asking from its customers each month.

Whilst this may seem like a welcome measure to some consumers who want to reduce their monthly outgoings it could mean that some cardholders with Barclaycard could spend more than a lifetime trying to repay their credit card debt.

According to industry experts consumers with debt of as little as £5000 on their credit cards could spend an astonishing ninety eight years repaying the debt due to the minimum repayment changes if they only ever make the minimum repayment each month.

Previously customers of Barclaycard had to make a minimum repayment of either £5 or 2.5 percent of the balance outstanding depending on which was the greater amount. However, this has now been changed to a minimum repayment of £5 or 1.5 percent of the balance, depending on which is the greater.

Officials from Barclaycard have claimed that they have their customers’ best interests at heart, and this is why they have decided to cut the minimum repayment level. The lender said that it hoped the reduction in the minimum repayment required would help borrowers that were struggling financially in the current climate and were struggling to meet their debt repayments.

The lender went on to state that the savings that borrowers made each month as a result of the minimum payment reduction could go towards important repayments such as mortgage debt or bill payments, which could otherwise affect their day to day lives.

Tags: industry, month, credit card debt, best interests, bill, Credit Cards, GBP, company

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Comments

One Response to “Some cardholders could spend more than a lifetime paying their credit card debt”
  1. Simon @ shrewdcookie.com says:
    August 9, 2009 at 6:58 pm

    Repaying at that level will certainly increase the length of time it takes to repay the debt – especially for those who pay minimum monthly payment.

    Some will pay the minimum monthly payment because they are having cashflow issues and cannot afford to pay any more – others will pay simply because it is a “lifestyle choice” and they have been using their credit cards to buy “wants”, a lifestyle, a standard of living – not because they have been paying for necessities.

    It would be interesting to see if other people commenting on this post would, given the opportunity, reduce their level of monthly repayment.

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