An alternative way to look at it is to imagine someone has a credit card limit of 5k. I know of people who treat this as the hard limit
When I got my first credit card,the minimum payment was 5%.Its now down to around 2%,so effectively making credit cards interest only.
Unfortunately,I think that the UK forced the bank to raise the minimum payment.
Research has shown that a lot of people pay whatever the minimum payment is. So if it's 2%, they will pay 2%. If it's 10%, they will pay 10%.
I think that raising the minimum payment would be far better than putting up interest rates.
The new culture I've noticed of credit cards is to see the limit as a target. I personally don't understand this way of thinking. But I think the credit card companies by their practices have encouraged this thinking and it should be up to government to row back the tide on this.
One way they could help is that apart from not allowing credit card limits to be automatically increased. Another thing they could do is disallow minimum payments that do not decrease the debt.
I would be worried if I had a 28year old who could not figure this out without asking parents.
"I have a 28 yr old who has a cc and can't figure out why there is a credit of couple of hundred on it,"
I would be worried if I had a 28year old who could not figure this out without asking parents.
"I have a 28 yr old who has a cc and can't figure out why there is a credit of couple of hundred on it,"
I would be worried if I had a 28year old who could not figure this out without asking parents.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?