By Eamon QuinnA UK watchdog may recommend removing minimum repayments from credit card statements because it feels it encourages users to build up debt at expensive costs.The Financial Conduct Authority said that it is considering to ‘de-anchor’ the minimum repayment to encourage more people to pay more than the minimum repayments and to stop using credit cards for long-term borrowing.It made the proposals after carrying out research on the way consumers use credit cards.“Given the effects we observed during our testing, we are considering consulting on changing our rules and guidance to mandate the removal of the minimum repayment anchor,” the authority said.“We consider a de-anchoring measure has the potential to increase consumers’ credit card repayments where they can afford to do so while preserving the flexibility of credit cards, which millions of consumers value,” the watchdog said.It said academic studies had previously showed credit … [Read more...] about UK plan for credit cards
Stop paying credit cards
The first credit card to charge a flat fee rather than a rate of interest has launched, aimed at those struggling to build a credit score. The card, from 118 118 Money, has a tiered monthly charge depending on the credit limit, but does not have other charges such as late payment or returned payment fees. Unusually for a credit card, there are also no fees to withdraw cash. It costs £8 a month for a £250 credit limit, £14 a month for a £500 credit limit and £17 a month for a £1,200 credit limit. As customers' credit ratings improve, they are offered higher limits. Whether or not this represents a good option depends on the situation. Someone borrowing with a £250 credit limit would incur £96 in fees a year, the £500 credit limit option comes with £168 in fees a year and the £1,200 option would cost £204 in fees a year. This is less than, or equivalent to, paying the level of interest on a regular “credit … [Read more...] about The interest-free credit card that costs £168 to borrow £300 – who is it for?
Credit card signatures are now going the way of old-fashioned carbon copy slips: discarded in favor of streamlined transactions. The three major credit card companies will stop requiring signatures on purchases this week, with MasterCard, American Express and Discover relaxing their policies on Friday and Visa set to do so on Saturday. It doesn't mean that you won't be asked to sign receipts ever again, but the change is likely to result in fewer of your John Hancocks landing on the dotted line. The reason for the change is due to technology and changing consumer habits. In an October blog post about the pending changes, MasterCard said that more than 4 out of 5 transactions in North America didn't require a signature at checkout. Getting rid of the signature requirement "is another step in the digital evolution of payment and payment security," MasterCard executive vice president Linda Kirkpatrick wrote in the blog post. Investing in other ways to combat fraud That … [Read more...] about Why credit card signature requirements are now a thing of the past
IT'S fair to say Brits' love affair with plastic shows no signs of ending. Millions of us don't think twice about reaching for our credit card for everyday spending or splashing out and putting the summer holiday on it. In total, we've got an eye-watering £61billion in outstanding card debt but what about when the bills finally come through the letter box? There are increasing concerns that Brits are carrying too much debt with watchdog the Financial Conduct Authority (FCA) warning that five million of us are struggling to to clear their debts. But there is a way you can cut the cost of your bills - potentially by thousands of pounds - and interest payments by switching your debt to a balance transfer card. There's a few things you need to be aware of but if you use them properly, they can make a real difference to the cost of your debts. Here's what you need to know about how you can save thousands of pounds. What if you could get a credit card that helps you pay off your debts? … [Read more...] about The easy way you could save THOUSANDS when paying off your credit card
THE Sun today calls on our army of readers to help millions of struggling Brits get out of debt and Stop The Credit Rip-Off. We're calling on you to help pressure the financial regulator into putting a cap on the total amount repayable to doorstep lenders and for rent-to-own goods such as tellies and washing machines. Around seven million people in the UK resort to high-cost credit to help make ends meet, and many of them end up paying more than double what they borrowed in the first place. People whose wages or benefits don't stretch far enough need to borrow from rent-to-own or doorstep lenders to help pay for things such as an unexpected bill or to furnish their homes. These come with exorbitant rates of interest – more than 1,500% in some cases of doorstep lending. If we get more than 100,000 signatures, the Government will consider our issue for a debate in Parliament. MPs, Peers and campaigners from across the political spectrum have welcomed The Sun's campaign and urged … [Read more...] about Sign our petition: Support The Sun’s campaign to Stop the Credit Rip-Off