Consumer groups have spoken out over the regulatory changes that have been proposed, and whilst some of the changes have been widely welcomed by campaign groups and consumers there are some changes that are giving cause for concern. One of the changes that has been proposed as part of these reforms relates to the minimum repayment.

At present around 11 percent of credit card holders make only the minimum repayment on their credit card balances each month, and under the new proposals the amount or level of the minimum repayment would be increased.

Of course, there are many benefits to having the minimum repayment increased, as it means that the cardholders would get themselves out of debt far more quickly and would also pay far less interest on their debt.
However, there are concerns that in the current financial climate where people are already struggling to make ends meet in many cases some people could find that the increase on the minimum repayment tips them over the edge financially and leads to them being unable to meet their financial commitments.

Currently the minimum repayment level set by most lenders is 2 percent of the balance, and under the reforms this may need to be increased to 5 percent, which would be a sharp increase for many people that are already struggling with their finances.

One industry official said: “For customers already struggling to meet repayments, an increase in how much they are required to pay each month could tip them over the edge. More measures would need to be put in place to stop these customers getting further into debt.”

One of the proposed reforms that is receiving a lot of support is that which would see card providers allocating repayments from consumers to the most expensive debt first rather than the other way around, which could help the consumer to save a fortune in interest.

One official said: “It is basic financial common sense that you repay your most expensive borrowing first and the cheapest last, yet the majority of the card industry gives its customers no choice but to do the complete opposite.”

One official from the UK card payments association APACS said: “These proposals risk disadvantaging more customers than they protect.”

A campaign official from Which? said: “It’s wrong for card companies to entice people into spending more money than they can afford. Anyone who wants or needs more credit just has to contact their card provider and ask for it.”

Will credit card reforms help or hinder consumers? is a post from: Credit Cards Web

As a result of the huge increase in food costs many people have turned to discount supermarkets in order to cut back on the cost of their food shopping, and this has been reflected in an increase in sales at stores such as Aldi, Netto, and Lidl. Many consumers have ditched the big name stores such as Tesco, Sainsbury’s, and Asda because of the rising cost of food and household goods.

Furthermore, a recent report claims that those that switch to a discount supermarket such as those named above could actually save around 20% on their shopping bills, which in he current financial climate could prove extremely useful to most households. Research was carried out by the consumer campaign group, Which?, and officials from the group claimed that there was a significant difference at the checkout when shopping at one of the discount stores compared to one of the traditional supermarket giants.

Using a list of fifteen items researchers compared the costs. It was found that the fifteen items at Tesco cost 21% more than at one of the discount supermarkets, Lidl. At Aldi the price was lower than Tesco by around 18%. More and more people are turning to the discount stores in order to cut the cost of their weekly or monthly shop, and this is making the bigger name supermarkets nervous with regards to how to hang on to their client base.

In fact many of the major supermarket giants have been taking action to try and increase custom and win back customers from the discount stores. Many have reduced the cost of thousands of items, launched greater discount products, and relaunched own branded items in order to help consumers to cut their grocery bills and come back to the bigger name stores. However, the discount supermarkets have also been fighting to keep a hold of the new found custom through increased advertising and improvement in their ranges of products.

One official from Which? stated: ‘Which? members have already become wise to the concept and rated Lidl and Aldi higher in this year’s retail survey. You weren’t impressed by the shopping experience or service, but you were happy with the prices.’

Which? officials added: ‘Tesco was cheapest for two of the 15 items we bought – milk-chocolate digestives and mature cheddar. Aldi came out cheapest on five items and Lidl on three, while all three stores matched prices for bananas at 67p and salted butter at 85p.’

Which? also said: ‘We didn’t attempt to compare the quality of the ingredients but when it comes to the contents of the cheapest food, the discount stores did just as well and sometimes better than Tesco.’

How much could you save at discount supermarkets? is a post from: Credit Cards Web