Credit card companies coming down hard on missed repayments

With many people struggling to keep up with repayments on their credit card debt, coupled with today’s fast pace of life, many consumers in the UK have been caught out when it comes to missing a credit card repayment.

Although some people have standing orders or direct debits set up so that their repayment goes out automatically each month, many others prefer to make their repayments by phone or cheque, and this can increase the risk of missing a repayment on the card.

However, although one missed repayment might not seem like such a big deal considering the bad debts that banks and credit card companies are dealing with, many credit card holders are unaware of just how much it could cost them to miss a repayment.

According to data released by Moneysupermarket the cost of a missed repayment in some instances could amount to several hundred pounds. This is through penalties and charges as well as increased interest rates.

Those with special benefits such as interest free credit for a specified period could find that a missed repayment results in the credit card company reverting their account back to the standard interest rate, which could really swell the balance that has to then be repaid on the card.

One spokesperson from Moneysupermarket stated: "Those on a zero per cent balance transfer introductory period may not be aware of the severe penalties a single missed payment can result in."

In addition to having to pay higher interest and penalty charges for missing a repayment, consumers could also find themselves having to deal with a drop in their credit rating, which could affect the kind of finance that they are able to get in the future, so the missed repayment could continue to affect them even after they have cleared the balance on their credit card.

Tom Smith
16th March 2007