Credit card companies 'should increase minimum payments'
Published On 15 June 2007
Credit card companies should increase the minimum monthly payments they ask consumers to pay, rather than reduce them, a debt expert has said.Earlier this week, Barclaycard revealed that it was reducing the amount that credit card customers had to pay back every month.
However, Andy Davie, spokesperson for the website IVA.co.uk, said that this move would mean that people could end up in even more serious debt problems then before.
He described Barclaycard's move as "the wrong decision", claiming he would rather see "an increase in minimum payments".
Mr Davie explained: "With … low minimum payments, people just don't knock anything off the actual balance and before they know it, they're maxing out on their credit cards.
"I'd … rather see them raise the limit; raise the minimum payments, because at least then there's room to manoeuvre if people get into trouble.
"At the moment, if you're just paying back two per cent and you get to the point where you can't afford that, where do you go from there?"
However, Mr Davie acknowledged that credit is "needed" by many consumers. He added: "People need to be protected from themselves with regards to credit."
Recent figures from the British Bankers' Association (BBA) showed that credit card lending fell by £143 million in April in the UK.
