Credit card ‘minimum payment’ is reason for many people building up considerable debt

Re: Credit card ‘minimum payment’ is reason for many people building up considerable

I pay mine off each month without fail... never miss a repayment

mf1 said:

Which bit of "I'm spending the (borrowed) money - I have to repay it" do people not get?

mf

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I think peple know that it must be repaid but are not conscious of the fact that they are being fleeced.


Quoted by Bronte...''I actually think they should put a rule in place whereby the minimum payment means you will pay off the debt in a reasonable time''.... That should/would help...would need to be set at six months max or so as otherwise considerable interest paid. It would be better means though to control minimum payment calculation as any substantial amount borrowed would have to be cleared in six months.

Re: Credit card ‘minimum payment’ is reason for many people building up considerable

AlbacoreA said:

Its not a bad idea...

I always thought paying the minimum payment avoid interest, but I realise thats not always the case.

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I am surprised at this. I assumed everybody knows that if you don't pay off your balance in full, you are charged interest on the full amount from the date of purchase.


See here for CC data: http://www.centralbank.ie/

CB monthly stats:

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Here is the actual pdf with the monthly stats:

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Re: Credit card ‘minimum payment’ is reason for many people building up considerable

End 2009 data.

2.17m personal cards, outstanding bal = 3bn.

Re: Credit card ‘minimum payment’ is reason for many people building up considerable

wow!

Re: Credit card ‘minimum payment’ is reason for many people building up considerable

Protocol said:

I am surprised at this. I assumed everybody knows that if you don't pay off your balance in full, you are charged interest on the full amount from the date of purchase.

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That is the issue... i know many that just focus on clearing the minimum payment and think they avoid interest by doing so.

Thanks for the stats. 3bn in debt on credit cards is ridiculous.. I think Financial regulator at fault here for not having better control... better limits to lending and better ways of making sure debts paid faster e.g. Bronte's suggestion of a time limit as per earlier post.

Re: Credit card ‘minimum payment’ is reason for many people building up considerable

Protocol said:

I am surprised at this. I assumed everybody knows that if you don't pay off your balance in full, you are charged interest on the full amount from the date of purchase....

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I think theres some variation on different cards and promotions etc.

Re: Credit card ‘minimum payment’ is reason for many people building up considerable

Protocol said:

End 2009 data.

2.17m personal cards, outstanding bal = 3bn.

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Sounds like alot, however people forget that credit cards are essentially a payment tool and approx. 60% of all cardholders pay their total balance in full each month.