MSE News: Government steps up credit card crackdown

djm1972

I know this is in danger of making it all more complicated again; but how about linking the minimum payment % amount to the average APR?

This would keep stoozers happy because debt at 0% could keep a low minimum payment amount (or even perhaps give lenders the option of no minimum payment on 0% average APR), whereas if debt was being carried at far higher APRs this would result in a much higher minimum payment requirement.

The reason I say average is because I wouldn't want this idea to hinder the allocation of payments to the highest APR sub-balances first.

techspec

Daftest thing i've heard in years.

Paying more each month means more chance of being unable to pay = charges.

It was an increased credit limit from ALL my creditors that helped me get back on track. Lower limit = more chance of going over = charges,

The only good thing is stopping interest rates going up once you have the card. After all, they never go down do they. Higher rate lending should also be paid first.

Overall a daft idea that will push most customers over the edge.

p.s this year Gordon and his FSA cronies gave the credit card companies permission to share extra info. Your credit report now tells them who switches cards for the 0% interest. Those people will struggle to get cards now. Don't trust Gordon and Co - friends of the rip-off banks.

philipeden

If there is a minimum 5% payment, then end game, totally sc****d

philipeden

It has the same logic as if someone is stuggling to pay the rent ..... well if you paid more you would not be behind !!!!!!!

ok lets say the companies are forced to changed the min payment. if you can't pay then what .....

Paulgonnabedebtfree

nomoneytoday wrote: »

I think it's a fantastic idea. A 2% minimum payment is too low, as it doesn't clear the debt fast enough in my opinion. MSE Martin has previously shown examples whereby a debt takes 40 odd years to clear at minimum payment rates for example!

If finances are at a level where this makes a tipping size difference to household budgets then it sounds to me as though the credit card is being used wrongly. They are for convenience, Section 75 coverage, cashback and spreading purchases over short periods. (With the odd exception such as unplanned reduncancy and pregnancy etc)

I do agree with you but baulk at the idea of applying increased minima to debts that already exist.
I also think that using a credit card "wrongly" should be avoided where possible. I was always very savvy about money/debt etc. However, sometimes people go through major unforseeable life changes. I started using credit in a way that I disagreed with. It's unpleasant to get caught in a trap due to ignorance. It's even worse when you can see clearly what is happening but are powerless to change it at that time.

Amanda_Butler

I think it is good that the government are looking at the way credit card companies are conducting their business. I always pay slightly over the minimum payment but if they enforce a larger minimum payment I may struggle to find the money. At the moment I have the choice to overpay! What they need to do is lower their interest rates - some of them are really high especially when interest rates are so low at the moment.

MSE_Martin

Thank you all for this feedback - we will be putting forward an official MSE view on this - which we will publish for further discussion before it goes it. Though it is a site view not a forum view (as that is a broad church - and a view is of course impossible) but the comments here here evidence that and the range of options work.

Martin

petera74

never-in-doubt Thanks for the info.

I never got a letter to say it was increasing, it just happened. This goes back to Jan 2008, I havent used the card from Jan 2008 to current date. Can I call them and request it to back to 15.9%? Will I get a rebate for all the interest charged at 29.9% from Jan?

Thanks
again

Peter

MSE_Martin

petera74 wrote: »

never-in-doubt Thanks for the info.

I never got a letter to say it was increasing, it just happened. This goes back to Jan 2008, I havent used the card from Jan 2008 to current date. Can I call them and request it to back to 15.9%? Will I get a rebate for all the interest charged at 29.9% from Jan?

Thanks
again

Peter

Hi fraid not - if you read the reject rate rises guide its all in there - these new rules came in in Jan 2009 - so yours was prior

never-in-doubt

petera74 wrote: »

never-in-doubt Thanks for the info.

I never got a letter to say it was increasing, it just happened. This goes back to Jan 2008, I havent used the card from Jan 2008 to current date. Can I call them and request it to back to 15.9%? Will I get a rebate for all the interest charged at 29.9% from Jan?

Thanks
again

Peter

Unfortunately not - as Martin says on previous post.... there is no retrospective recourse (unfortunately).... :mad:

You can, however, refuse on any future increase to APR..