It’s true that the government have put foward new proposals to help credit card holders to save money and get into less debt. The government aims to make lending more respsible and efficient by not allowing credit companies to increase credit limits without the credit card holder’s consent…
In our opinion it doesn’t help much, but at least it’s a start. When you’re bombarded by more and more credit it’s sometimes difficult to stay out of your new limits. These new steps will stop all of this happening, and hopefully save customers an estimated £300 million a year.
Having a low credit limit is a good thing, and it exists for the purpose of limiting your spending. Some credit card companies can get a little silly about raising credit limits automatically without reviewing individual cases. Someone who has borrowed a lot and managed to pay it back will usually get upgraded to a larger credit limit, but this person may have lost their job recently or they may have only been able to pay off their bill with the funds from another card; investigations and recommendations should be sought when raising the limit on anyone’s credit card.
The next logical step in our opinion would be to raise the minimum payments on credit cards too. This way you will be able to identify people who cannot afford the payments much sooner, before there is a problem and before the debt is too larger to manage. Not only that, but people who are required to pay more back each month are less likely to spend as much on their card. But i suppose one of the most important reasons for raising the minimum is so that the card holder can stands a chance of actually paying back their borrowings. On average, a person with £5,000 debt who pays only the minimum amount will actually end up repaying an extra £2,289 with the interest added.
Tags: credit card advice, Credit card news, credit card repayments