Card companies spark debt fears with repayment reductions
August 1, 2007 by admin
Filed under News, News-Credit-Cards
Minimum repayment levels of some leading credit cards are set to be reduced.
Cards providers have heavily advertised the reductions recently.
However, many in the industry are criticising the new offers, saying that the card providers might be exacerbating the UK’s debt problem.
To take an example from today’s Minimum Repayment Index from price comparison website uSwitch, M&S is reducing its repayment level from three per cent to 2.5 per cent, which might well appeal most to the ’spend today and worry tomorrow’ consumers who are currently racking up debts.
Barclaycard has also recently announced that its rate will be cut from 2.5 per cent to 2.25 per cent.
Lowest of all are lenders such as Bank of Scotland and Egg, who offer a tiny two per cent repayment rate.
Research released by Alliance & Leicester last week showed that the overall level of debt in the UK stands at an enormous £1.3 trillion, with those on lower incomes being particularly badly hit.
