Minimum repayments hiked by card firm
Many cardholders are to have their minimum monthly repayments increased from £5 to £25, the Guardian reports.Card provider MBNA, which runs services for banks including Alliance & Leicester and Virgin Money, is scheduled to introduce the rises later this year.Formerly, a system whereby the customer paid the lesser of £5 plus interest or three per cent of the outstanding balance was in force.However, this is to be changed to £5 plus interest or £25 - a move which will particularly affect those who have comparatively small amounts of debt.Nevertheless, MBNA points out that the increased compulsory payments will result in more people being pulled out of debt.According to figures from payments association APACS, 3.4 million Britons only pay the minimum amount each month on their cards.A spokesman for MBNA said:"'From a customer's point of view, the change is a good thing as the more debt they pay off, the better, but clearly, if some people can't afford to pay [the new minimum repayment] then they can come to us and we'll try to resolve it."
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