MSE News: Govt credit card crackdown – MSE submission: Editorial comment

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  • CannyJock
    CannyJock Posts: 3,838 Forumite
    Combo Breaker First Post
    edited 22 January 2010 at 8:03PM
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    edgex wrote: »
    its all very well 'showing' people what impacts different payments would have, but what if the low minimum payment isnt a good thing to be doing in the first place?

    Then you go for one of the other options? As mentioned above, for people with multiple debts they should only make minimum payments on the lowest APR and 0% APR debts, allowing them to pay as much as they can to their higher APR debts. There's nothing inherently evil about minimum payments if you know how to use them to your advantage.
    "A child of five could understand this. Fetch me a child of five." - Groucho Marx
  • barber1
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    I am fortunate enough to always pay off my credit card each month so any increase in minimum payments will have no effect on me.

    However, it does concern me that other less fortunate people are drawn into a debt cycle through either ignorance or circumstances. In my opinion the advantages of increasing the minimum payment are:-

    a) to ensure that people are actually paying back their debt, and

    b) it keeps people more in touch with the repercussions of putting stuff on their card.

    I'm going to be devil's advocate here and say that I think there should be a statutory repayment rate on all credit cards of 10%. I do agree with an earlier poster that this should only apply to new cards.

    The advantages for consumers:-

    a) less likelihood of insidiously getting deeper and deeper into debt,

    b) if people are struggling financially alarm bells are going to sound a lot sooner than they would with minimum repayments of a few percent,

    c) if you know you've got to pay 10% of your balance each month I think a lot of people will think twice before bunging stuff on the card without thinking.

    Draconion maybe but in my opinion there are too many people at risk of drifting into debt - and its not just the cardholder who suffers when things start to go wrong - think of the families and friends who have to deal with it.

    Low minimum payments play right into the hands of the credit card companies.
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