The Government is Taking Measures to End Rip-Off Balance Transfer Deals
It seems like the days of 0% balance transfer credit card deals are coming to an end. Prime Minister Gordon Brown has declared that the government is going to take a series of measures to stop credit card companies from getting more consumers indebted by using balance transfer schemes.
The lenders will be forced to use repayments to clear consumers’ most expensive debts first. The negative payment hierarchy credit companies have been using so far mean that you need to pay off your cheapest debt first while the more expensive one keeps accruing interest.
There will also be changes concerning minimum payments. The lenders will have to explain what will happen if you make only minimum payments. The payment itself will have to cover at least fees and charges, interest and 1% of the existing debt.
Financial experts predict that these measures might lead to the end of attractive 0% balance transfer offers as well as an increase in credit card fees because lenders will have to look for other ways of making profit.
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