Discussion in 'Finance, Property, Law' started by Bowser-Mong, Oct 27, 2009.

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  1. G'day.

    I have just been watching GMTV (Penny Smith mmmmmmm) and there was an interesting feature on new legislation that is being considered by the Government regarding how Credit Crard companies deal with customers. Two solutions being considered is to stop theSe companies from raising a customers credit level without permission and to raise the level of minimum payment each month by the customer. First one is great but woudn't the second one put more strain on people as, whilst the idea is to help them pay off the debt earlier, the reason some use the minimum payment at the moment is it is all they can afford to meet so it would have a knock on effect and put more financial strain on some families.

    Has anyone heard of these and any other solutions in greater detail?

    And no its not because I am upto my eyeballs in debt before any pi5stakers get that in. Aside from a mortgage and a wife.......
  2. Solution 1: Why? Is it a problem? It doesn't matter what your credit limit is. If you borrow more than you can afford to pay back, you shouldn't be trusted with a credit card.

    Solution 2: It would be better to withdraw the credit card from anyone who doesn't pay off in full at least 10 months in every year. If you can't pay off the outstanding balance, what chance do you stand of paying off the escalating interest? (Refer to Solution 1).
  3. I think this is the Government consulting with the industry on the way forward. There are, I think, 96 areas to be discussed.

    Two good points were made this morning; firstly, that the minimum payments system means it takes up to 40 years to clear the loan and, secondly, that the most expensive bits of the loan are always paid off last. Both of these hurt the borrower.

    However, I will ask the question: "why review the system now?"

    The time to clamp down on this was 2-3 years ago. Tightening the rules in a deep recession will only lead to borrowers falling into arrears.

    If you wish to contribute, I reckon the BBC1 website will link to the target website.