Consumers spreading their credit card repayments : Credit Card Guide

Consumers spreading their credit card repayments

A recent report has shown that consumers in the UK are continuing to rely heavily on credit cards, and many are spreading repayments on their balance so that they can avoid financial struggles and having to make major cutbacks.

The recent series of interest rate rises – five rises of 0.25% each in the past year – means that many consumers that would normally have made larger repayments on their credit card balances will only be able to smaller repayments due to great financial commitments in other areas.

Officials state that the growing level of debt in the UK is not having an impact on repayment habits, and credit is still on the increase in the UK. One official stated: "Many of us use our borrowing as an acceptable means of maintaining our standard of living." She added that more and more people are having to rely on credit, and that stretched household commitments have led to fewer people being able to repay larger chunks off their credit card balances.

The good news is that those wishing to spread the repayments on their credit card debts can look at 0% balance transfer credit cards, which will enable them to spread the repayments over a longer period without being hit by interest charges. For those that do not think they can clear the balance on their cards within the interest free period there are also low interest life of balance transfer cards available, where the low rate is applied until the balance is cleared, and no balance transfer fee is charged on the transaction.

Consumers are advised to look at restructuring their repayment and borrowing based on their financial situations, as many have taken a real hit as a result of the rising interest rates, which have in turn led to an increase in repayments.

Tom Smith
13th September 2007

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