It is tough NOW. So how are we coping

wigglebeena

More bankruptcies, more forced repossessions, lots of well-paid illegitimately expensed MPs picking up lovely cheap repossessed properties. Where's the bad?

Rummer

That would really effect me if they changed the rates. Fingers crossed they don't.

Penelope_Penguin

elizabunny wrote: »

the miniumum monthly repayment could be increased from 2% to 5%. In effect meaning that if the minimum payment per month is now £40, this could rise to £100.

Thing is, though, if you only pay 2% you're never clearing any of the balance IMHO, it's fairer to have a minimum payment of 5%; at least then you have some chance of paying the debt

Additionally, there'll be less charges and interest!

Penny. x

kidcat

Penelope_Penguin wrote: »

Thing is, though, if you only pay 2% you're never clearing any of the balance IMHO, it's fairer to have a minimum payment of 5%; at least then you have some chance of paying the debt

Additionally, there'll be less charges and interest!

Penny. x

I agree with that, but having been in the position where I could only just about make min repayments each month, this would have killed me. I think it may be better to have it increased to 5% for all new accounts and the default setting on old accounts moved to 5% but with the option of reducing it back to 2% for existing customers. As alot of customers are just paying the minimum due to DD being set up that way and them not being bothered about increasing it.

Savvy_sewing

With all this threats, I am so glad that I do not have a credit card anymore. I am hoping that I will resist the temptation to ever get one again.
Have only just been directed to this thread, so it looks like I have a lot of reading ahead of me over the next few days!.

morag1202

It may be worth remembering that the min payment always used to be 5% and the banks lowered it to encourage people to borrow more :eek:

Penelope_Penguin

morag1202 wrote: »

It may be worth remembering that the min payment always used to be 5% and the banks lowered it to encourage people to borrow more :eek:

.............. and because the capital sum took longer to pay off, the lender would reap more in fees :rolleyes:

Deregulation of the banking industry has been a disaster for the country, and a personal disaster for many families

Penny Penguin, CAB debt adviser

maryb

I'm old enough (just) to remember the Barber boom in the early 1970s which ended in tears. That was when credit cards were new and people were being encouraged to take them out by advertising like "Access takes the waiting out of wanting". Minimum repayments were 2% then too. I remember when they were suddenly hiked to 5% when th Government was trying to rein in the runaway inflation that resulted from the boom and how distraught people were who were barely coping as it was. Pay rises were limited by the prices and incomes policy and simply did not keep pace with inflation.

That is one of the reasons why when I eventually got a credit card of my own I always paid it off each month.

At least inflation is fairly low at present (depends what you look at - food still seems to be going up in price - and whether you believe official figures) and mortgage rates are low. Imagine what it would be like if everything was shooting up in price at the same time as they hiked the payments. It's probably a good idea to get people used to making higher payments now because once the Bank of England stops pumping money into the economy interest rates could well rise

ceridwen

kidcat wrote: »

I agree with that, but having been in the position where I could only just about make min repayments each month, this would have killed me. I think it may be better to have it increased to 5% for all new accounts and the default setting on old accounts moved to 5% but with the option of reducing it back to 2% for existing customers. As alot of customers are just paying the minimum due to DD being set up that way and them not being bothered about increasing it.

I would agree with that proposal.

I'm not too sure what the Govt could do about people who just intend to go on "maxing out" their credit cards if they already have one. A proposal like this would help them - as well as those who are struggling and just couldnt find the money to pay more than 2%. But - one needs to help the "strugglers" and just accept that it would also help the "!!!!less". So - I'd go for an element of interim protection for, say, the next year - then whack everyone's up to the higher figure.

I WOULD be a lot harsher on those who havent yet got a credit card - 5% is peanuts as far as they are concerned. I'd certainly make new credit card holders repay AT LEAST 10% per month - I'd be aiming for 20% a short while later too (as soon as everyone had got used to thinking "new credit cards mean I pay 10% per month" and the more farsighted realised that a further rise would likely be in the pipeline for soon after and tried to alert others to that).

The Government does need to find suitable ways to get everyone who can afford to to repay all their debt now and to ensure that no-one takes on any further debt (bar an absolute emergency).

BigMummaF

I'm afraid of wording this so as not to offend, so if you could bear with me....

I fully accept that some people find credit of any description a god-send, but let's not forget that it is still spending money you don't have at that particular moment. There's always going to be that unexpected disaster; car failing MOT, the cat swallowing your wedding ring, etc etc & plastic is helpful then. But to rely on them every month to pay for the groceries the week before pay-day, is just asking for trouble.
In effect you are perpetually in debt. My old pa used to live by the saying: "If you can't afford one this week, you'll never have the cash for two next" which is very, very true & a lesson one of my own has learned the hard way.
I'm not sure if there is anyone to blame other than the marketing departments of these legalised loan-sharks, for portraying a Eutopia where anyone can have whatever they like NOW, as opposed to the dark ages of my youth when you had to SAVE for something first.
Of course I've had HP over the years but ALWAYS at a price I knew I could pay for a fixed term so I knew when it ended, & avoided the kind of contracts credit cards employ like the plague.

Just my ha'punth ...interest free if you sign up in the next 32secs :rotfl: