The charity StepChange has launched a new service designed to help anyone getting letters from their credit card companies asking them to increase their repayments.
New rules mean that credit card providers are being obliged to reengage with customers who are in “persistent debt” and have been stuck in the red for the past several years.
That reengagement effort is expected to see more than a million people receiving letters from creditors in the coming weeks, generally with requests for larger repayments on outstanding debts.
By way of a response to the situation, StepChange has created what it’s calling a “new online information and guidance hub”, which features a repayment calculator that should help people figure out how they can keep up with any new demands from their credit card providers.
Persistent debtors in these contexts are those who’ve been racking up interest payments and charges in relation to their credit cards for 36 months or more.
The Financial Conduct Authority (FCA), which regulates the financial services sector across the UK, introduced rules recently demanding that credit card companies do more to make sure people aren’t left to languish in debt for too long while only paying off minimum amounts.
The basic advice from StepChange to people who are in persistent debt and who receive letters from their credit card companies is not to ignore them but only to enter into repayment agreements that are genuinely affordable.
The charity suggests that third party advice on these issues will be particularly valuable to anyone who has multiple credit cards and is being asked by each of their providers to establish debt repayment plans.
“Getting this sort of guidance will help people work out a realistic budget from which to decide whether proposed repayment plans are affordable or not,” explained Phil Andrew, StepChange’s chief executive.
“If they are, all well and good. If not, we can then help by offering more detailed advice and solutions depending on people’s individual circumstances.”
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