| Consumers have been warned by one price | | | | small amounts consumers could end up paying off |
| comparison website that only paying the minimum | | | | mortgages and secured loans before clearing card |
| amount on a credit card balance each month could | | | | balances. |
| lead to an increased "debt sentence". | | | | "In an environment of rising interest rates where |
| According to uSwitch, those borrowers who choose | | | | personal debt in the UK has reached a staggering |
| credit cards over cheap loans - and opt to only pay | | | | 1,325 billion pounds, of which credit card debt accounts |
| off the minimum amount each month - risk extending | | | | for 54 billion, consumers could now finish repaying their |
| the time it takes to repay debt by up to 30 years. The | | | | mortgage before their credit card, despite the huge |
| warning follows news that both Barclaycard and M&S | | | | disparity in sums borrowed", he elaborated.uSwitch |
| Money have dropped their minimum payment amounts | | | | research found that 3.5 million Britons could spend 30 |
| to less than 2.5 per cent. | | | | years struggling with debt management if choosing to |
| Barclays is currently asking customers for a monthly | | | | only make minimum repayments. However paying a |
| installment of 2.25 per cent, down from 2.5 per cent, | | | | little more each month could see borrowers cut their |
| while borrowers with M&S Money credit cards can | | | | "debt sentence" by 15 years and generate collective |
| pay as little as 2.5 per cent a month, down from three | | | | interest savings of 5.5 billion pounds. |
| per cent. Incidentally, the price comparison service | | | | Figures released today by the British Bankers |
| suggests that to help negate debt management | | | | Association (BBA) suggest that borrowers are slowly |
| problems, the credit card industry should introduce a | | | | beginning to turn away from credit cards and seek out |
| minimum repayment limit of three per cent. | | | | cheap loans for their financial needs instead. Lending |
| "There is little justification for setting minimum | | | | on plastic fell by 0.1 billion pounds over the course of |
| repayments at just two per cent and we believe that | | | | June, the association revealed, while personal loans |
| it is time that the industry agreed a standard minimum | | | | remained popular. Borrowing on loans and overdrafts |
| repayment amount of at least three per cent on all | | | | was up by 0.1 billion pounds last month and secured |
| credit cards", said uSwitch personal finance expert | | | | loan lending grew by an underlying 5.1 billion pounds. |
| Mike Naylor. | | | | Meanwhile, Toby Clark, senior finance analyst at Mintel, |
| He added that despite moves to put 'health warnings' | | | | recently said that Britons are "wildly underestimating" |
| on credit card statements and to make literature | | | | how much money they owe on credit cards and |
| easier to understand, the majority of borrowers still do | | | | personal loans. The expert was speaking after |
| not comprehend the problems associated with only | | | | research from the firm revealed that 21 million |
| paying the minimum amount each month. Mr Naylor | | | | consumers owe 100 billion pounds more than they |
| suggested that by only paying off credit card debt in | | | | estimate. |