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  • Advice

    Used wisely, credit cards can provide a useful way to finance purchases, particularly where there are potential disputes or issues with the product or supplier. The problems, however, begin when borrowers can no longer afford to pay their balance in full. Not being able to pay off the full balances can trap people in ever-increasing debt. It is important to tell your card provider if you are struggling to make payments. Many are helpful and can arrange a payment plan better suited for your financial situation.


    What interest and charges can be added to my debt?

    Interest is based on a card’s outstanding balance. Extra charges may be added if you miss payments or pay late, but your creditor can only add charges if they are detailed in your credit agreement.


    What is APR?

    Interest will be shown as the annualised percentage rate or APR. The higher the percentage, the more expensive it is to borrow. Therefore, APR is a helpful way of comparing the interest costs of different loans or cards. You may be charged a higher rate if you have a poor credit score. If your debt is regulated by the Consumer Credit Act, you must be told the APR before you sign the agreement. This ensures you’ll know how much you’ll have to pay back.APR is a useful way to compare the cost of different loans or cards. But remember that the total interest added also depends how long the debt takes to repay. For example, a loan at 30% APR paid back in one year would have less interest added than a loan at 10% APR over five years.


    How to re-negotiate interest and charges?

    Your creditors are more likely to offer support and reduce your interest payments if you can prove that you’re experiencing financial difficulties.


    Truth in Lending Act (TILA)

    TILA is the first section of the Consumer Credit Protection Act (enacted in 1968) and was created to ensure that credit card issuers disclose all relevant information. For example, TILA requires that several details about the credit arrangement be disclosed — such as loan amount, APR payment schedule and other fees — and ultimately requires that many of these details be presented in a standardized “Schumer box.” Schumer boxes make it easier to directly compare different credit cards’ terms. TILA also requires that credit card statements note how long it would take to pay off the balance if you were to only pay the minimum payment


    What should I do if I think the interest and charges are too much?

    You should complain if the creditor is adding interest and charges which are more than those set out in your credit agreement.


    Noticed a billing error

    You should notify your card company as soon as possible if you notice a billing error. The law gives consumers up to 60 days to report errors, the card issuer then has 30 days to respond. During that time, they do not require that the cardholder pay the disputed charge.


    Striking Data

    According to "The Money Charity" ( the following give an idea of problems in the UK (data from 2020):-

    • The average household debt £60,363
    • The average credit cards debt per houehold was "2,595
    • Unsecurd debt, per adult £4,264
    • There were 12.8 Million people with less than £1,500 in savings
    • The average time to pay off a credit card making only the minimum payment was a staggering 26 years and 8 months and
    • 4.8 Million households did not have an essential household appliance (fridge, freezer, washing machine, cooker etc


    Credit Card Interest Calculator

    Please see the following calculator which can be useful in determining your ultimate financial liability -

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