Reno Charlton, award-winning writer, shares her financial expertise as a contributing columnist for www.credit-card-comparison-online.co.uk and www.personal-loan-comparison-online.co.uk.
In the current financial climate many people are struggling to keep on top of debt repayment such as credit card repayments, and for many the only option is to make minimum repayments at times when the budget doesn't stretch far enough. However, whilst making minimum repayments is okay on the odd occasion when money is tight it is not something that should be done regularly, as otherwise you could be hit with high interest costs and repayment of the debt will take far longer.
However, some credit card firms, such as Barclaycard credit cards, have gone a step further in a bid to 'help consumers' by further reducing the minimum monthly repayment that is required. At first glance, it might seem that the credit card firms are doing cardholders a favour as a result of this measure, as it means a lower repayment each month. However, when you look into it more carefully you will see that the providers are not doing consumers any favours by further reducing the required minimum repayment.
For example, as a result of the reduction in the minimum monthly repayment that has been introduced by Barclaycard it could take cardholders a whopping ninety eight years to clear a relatively modest credit card debt of just five thousand pounds.
Research that was recently carried out showed that based on an APR of 15.1 percent it would already take a lengthy thirty one years to repay a debt of £5000 with Barclaycard based on the previous minimum repayment. However, with the new, lower repayment this period would more than triple to ninety eight years. Even worse, it would generate additional interest charges of over sixteen thousand pounds!
If you are struggling with credit card debt repayments then, no matter how tempting the credit card firms make it sound, avoid making regular minimum repayments, as in the long term this will cost you a fortune and you will burdened with the debt for the rest of your life. You may want to consider transferring the balance from your credit card onto a 0% balance transfer credit card instead, which will allow you to repay the debt over a period of, say, a year or fifteen months without being charged any interest, thus making it a little easier to make a dent in the debt.
- Related Videos
- Related Articles
- Ask / Related Q&A
- How to Get the Best Credit Cards for Balance Transfers
- Where to Find the Best Credit Cards for Balance Transfers
- Credit Card Low Balance Transfer
- Credit Cards Best Balance Transfer Deals
- Got Credit Card Debt? Try Transferring your Balance
- UK Credit Cards and Balance Transfers
- 0% APR Credit Cards and Balance Transfer Offers
- Credit Card Debt Consolidation Programs: A Complete Guide
Learn About Joint Life Insurance For Retirees Plans
By: Lance Winters | 29/12/2009No riches in the world can stop the unavoidable ; no human in this world can predict what's going to happen tomorrow. If a badly timed death has occurred in your own family it is then when you realize that there is no power in our hands. The loss of loved one can provide you with a jolt and you think about how life would be after you place yourself in this situation. An insurance policy is oneacceptable way to ensure that your friends are having a safe future after you are now n...
Get an Auto Loan After Repossession in Canada
By: Rick Smith | 28/12/2009Your car got repossessed? Thats ok! In Canada a vehicle repo doesn't mean you can't get approved for a new car loan. Read about real situations where consumers with a past repossession got auto loan approved.
Credit Card Debt Counseling Compared With Debt Consolidation
By: Hector Milla | 28/12/2009When individuals have trouble paying their bills, there are various ways to resolve the situation.
Consolidating Credit Card Debts - Pros And Cons
By: Hector Milla | 28/12/2009If you are considering some of the options for getting rid of your debt, then consolidation has probably come up at least once.
Eliminate Credit Card Debt Without Bankruptcy - Legal Way
By: Hector Milla | 28/12/2009The scariest word in the English language for many people is "bankruptcy".
Credit Card Consolidation vs Debt Settlement Programs
By: Hector Milla | 28/12/2009For those people who have done their research, it should come as absolutely no surprise that there are some ways "out" of debt.
Fail To Pay Credit Card Debt? Know Your Options
By: Hector Milla | 28/12/2009If you are having trouble paying your credit card debt, then you should know that you are not alone.
Credit Card Debt Debt Consolidation-Becoming Debt Free
By: Hector Milla | 28/12/2009Credit card debt is easy to get into more deeply than you originally intended.
Credit cards make it easy to give to charity
By: Reno Charlton | 12/11/2009 | CreditIn the ongoing economic downturn and the difficult financial climate giving to charity is nowhere near the top of the agenda for most people, despite their good intentions. However, a recent report has shown that many people have found a great way around this problem enabling them to give to charity without having to overstretch their own finances in order to do so.
Budgeting is vital to repay credit card debt
By: Reno Charlton | 02/11/2009 | CreditWith credit card defaults having increased as a result of the financial crisis and credit crunch, and with some experts predicting that defaults could rise further, industry officials have reiterated the importance of ensuring that you budget property to make sure that you can cope with and repay your credit card debt.
Don't spend your lifetime paying off a credit card bill
By: Reno Charlton | 21/10/2009 | CreditMaking minimum repayments on a credit card debt can be a risky business at the best of times, and cardholders that do this tend to be hit hard in terms of interest and run a higher risk of exceeding their credit limits. However, some lenders have been reducing the minimum repayment for cardholders, and whilst this may seem like a good thing it actually means that you could spend your lifetime paying off your credit card debt.
Nobody Benefiting from Advertised Broadband Speeds in UK
By: Reno Charlton | 15/10/2009 | CommunicationWhilst many broadband providers in the UK may try and tempt customers by offering high headline speeds with their broadband packages, it has been revealed that in actual fact no consumers in the UK are receiving the broadband speeds being advertised by their providers, with most consumers getting nowhere near the advertised speeds from their providers.
Watch out for rising number of credit cards with annual fees
By: Reno Charlton | 13/10/2009 | CreditWith credit card firms finding a range of different ways to try and recoup financial losses consumers may want to keep their eyes peeled for a variety of credit cards that may start charging annual or monthly fees to cardholders. One credit card provider has already launched a card with a monthly charge, and many industry officials feel that this could be the start of a trend that many other credit card providers will follow.
Do you need faster broadband?
By: Reno Charlton | 08/10/2009 | CommunicationWe all want to achieve the best speeds possible when it comes to our broadband connection, as slower speeds can cause frustration and inconvenience to say the very least. Whilst the general rule of thumb is that the faster your speed the more you will have to pay it is important to remember that there are also other things that can affect the speed of your broadband.
Credit card industry could face wide ranging bans
By: Reno Charlton | 08/10/2009 | CreditThe credit card industry has faced a lot of controversy over recent years for a variety of reasons, and has been accused of treating its customers unfairly and charging too much in terms of fees, charges, and interest rates. It has recently been revealed that credit card companies could face wide ranging bans over the way that they operate, and this includes the banning of unsolicited credit card cheques, which has already been brought in.
Which is the right broadband package for you?
By: Reno Charlton | 28/09/2009 | InternetThe wide range of broadband packages that are available from the variety of Internet Service Providers these days means that there is something to suit all needs, but it is important to bear in mind that the needs of different individuals will vary based on what they intend to use their internet connection for.