Card providers are now pouncing on all their credit card customers even if they have only just missed the payment and even if the amount that they have failed to pay is a very small sum.

One example of this was from Marks & Spencer, and a consumer explained how after missing a repayment on a M&S credit card the company made over one dozen phone calls over a period of a few days even though the payment was only five days late.

The representatives from the company demanded either immediate payment or wanted a date by which the payment would be made.

The customer who had been receiving the calls said it was unbelievable, stating: “I couldn’t believe all the calls I was getting. This was the first time I had missed a payment on the card. I had just got back from holiday and told M&S that I would make my payment in the next few days, which I did.”

M&S has said in the meantime that any customer that is late with repayment will be treated in the same way.

An official from the company said: “We need to be proactive, particularly in these economic times. In many ways, it could be better for the customer, to prevent them from building up further charges.”

However, the timing of these measures from M&S is poor, as in the current financial and economic climate lenders are being pressured into being more lenient with borrowers that fall behind on repayments rather than being more stringent.

Credit card firms get tough on consumers is a post from: Credit Cards Web

Whilst this may be an effective option for those that clear their balance in full each month it can prove risky for those that make smaller repayments on their balances.

Industry officials are concerned that some people may be getting charged on their credit card accounts for late or missed payments, which could easily be avoided if the cardholder had a direct debit set up for at least the minimum repayment, allowing them to then make a manual payment for anything over and above the minimum repayment that they wanted to make.

This has been highlighted during the recent spate of postal strikes, where officials were concerned that those paying their credit card bills by cheque could be hit with charges through no fault of their own.

Even those that make their credit card repayment in full each month could benefit from setting up a direct debit for the minimum repayment as a precaution.

Whilst it is always advisable to pay more than the minimum repayment on credit cards setting up a direct debit for this amount would shield the cardholder from unnecessary charges resulting from missed or late payments, which can easily happen due to anything from postal strikes to simply forgetting to make the payment.

The cardholder can then contact the credit card provider to make additional payments if they wish to pay more than the minimum repayment and can even clear the balance in full.

Direct debit payments could help credit card customers to avoid charges is a post from: Credit Cards Web

Rising unemployment has added to the chaos in this area, and loss of income for many people has meant that they have been unable to make repayments on credit cards and other debts, leaving them in financial distress and facing a very uncertain financial future.

Officials from a national debt charity, Money Advice Trust, have recently said that it is important for consumers that find themselves in this situation, where they cannot afford to make repayments on their credit cards and other debts, to seek professional advice as quickly as possible so that measures can be taken to minimise the adverse effects of missing repayments.

The charity said that many people have already realised that this is an important step, and it has seen a sharp rise in the number of calls it has been receiving from struggling consumers.

One official from the charity stated: “If you are worried you might be getting into difficulty and you feel a drop in income might be on the horizon or are anticipating problems coming up, it is vital you get help earlier rather than later.”

She also said: “When getting debt advice you need to know about everything including the pros and cons and you need to get complete information on how all options of debt handling are going to affect you.”

In a separate report the International Monetary Fund has warned that Britain, along with other European countries, is heading for a severe credit card debt crisis, with defaults set to rocket as a result of rising unemployment levels.

Consumers struggling with credit card debt advised to get professional help is a post from: Credit Cards Web

The building society said that the UK needed to bring in regulations that would change the way in which credit card companies allocated repayments from credit card customers. This comes after new regulations regarding credit card repayment allocations were announced by the United States.

As of next year credit card providers will be subject to new regulations, and this will mean that they have to use the repayments made by credit card users to pay off the highest interest balances on the card first before starting to hit the lower interest or interest free balances.

This means that consumers will end up paying less interest on their credit card debt, as the higher interest balances, such as those from cash transactions, will not be left festering whilst the lower interest ones are paid off.

Officials from the Nationwide said that in the UK the majority of credit card providers use the monthly repayments from cardholders to pay off the lowest interest debt first, leaving the higher interest debt to fester and accrue more interest as time goes on. The building society now wants the government to consider bringing in similar regulations to the United States with regards to allocation of payments, so that consumers are not hit so hard by credit card interest.

Nationwide consumer finance director Jeremy Wood said: “Consumers can ill-afford to lose this much money, especially in the current financial climate. We feel it is time for the government to intervene and introduce regulation to benefit those affected. In the meantime, credit card holders should look at how their card provider allocates payments.”

Nationwide wants UK to follow US with credit card regulations is a post from: Credit Cards Web

In addition to this not only will cardholders that make just the minimum repayment be paying off their debt for decades to come, but many will also pay huge sums of interest over this period, making their borrowing far more expensive. In fact, cardholder with this type of balance could end up paying close to £3000 in interest over that period of time.

One official from uswitch.com stated: : ‘Over the past year we have seen an increase in credit card spending, making minimum repayment levels more of a problem now than ever before. With the cost of living on the up and people being forced to tighten their purse strings, consumers will be more tempted to just make the minimum repayment on their credit cards and spend the cash on more pressing bills.’

It is thought that around 11%, which more than one in ten, cardholders make only the minimum repayment, particularly in the current difficult financial climate. However, officials have said that even by increasing your monthly repayment by just a small amount you could find that the time over which you have to pay is cut dramatically, and the amount of interest that you end up paying is vastly reduced.

Cardholders could be making repayments for thirty years is a post from: Credit Cards Web