HBOS group has cut the minimum repayments that must be made by its credit card customers from 2% to 1% of the outstanding balance each month. The bank says the move is designed to help consumers on higher interest rates incurred by making cash withdrawals, online gambling and credit card cheques, reduce their balance.

But Simeon Linstead at price comparison site Uswitch.com said the move is confusing: "These latest changes from HBOS are really designed to help people carrying out transactions which carry higher interest rates. Unfortunately, due to the complexity of the changes being made, it is very difficult for consumers to understand if they will benefit or not. It doesn’t seem that all customers will benefit from this change, and some people would be better off under the 2% minimum repayment ruling."

He adds: "In the current climate we strongly advise people to carefully read all correspondence from their credit card provider, as it seems a new glut of ‘tweaks’ to terms and conditions are currently being implemented by providers. Generally speaking, making the minimum repayment may seem like a good idea at the time but it will barely touch the balance and could lead to a very long debt sentence."

---

Tag this article :