Abacus Daily Debt News

Credit card holders ‘lack repayment structure’

The lack of structure in repaying credit card debt is creating problems for consumers, it has been argued.

Samantha Owens of Moneyfacts.co.uk noted that although this form of finance is an important part of the banking industry, many consumers do not understand their commitments.

She said that changes to the system may be necessary, in order to allow customers to properly manage their money worries.

"Credit cards … come with the risk of a greater temptation to overspend; [they] are one of the most expensive forms of credit and [have] little or no structured repayment mechanism," Ms Owens explained.

The price comparison site called for the introduction of recommended minimum payments to be considered, as many people are not reducing their credit card debt by significant amounts.

A similar suggestion was recently made by moneysupermarket.com, which proposed recommended levels rather than mandatory ones because the latter would create further difficulties.

By Andy Mackay