Paying Minimum Payments on Credit Card Debts Equals Renting Debt

On December 6, 2012, in News, by Lewis Alexander
  • free credit report UK from ExperianAre you struggling with credit card debts and loan repayments?
  • Have you found that you are struggling to find the money to meet only the minimum payments for credit card debts?
  • Is the balance on your credit card hovering or increasing even though you are making minimum payments?

Credit card companies make more money when you fail to repay on time.  These companies have designed the cards they offer to compound with interest over time so the balance will not reduce if you are only making the required minimum repayments to these credit cards on a monthly basis.

When we speak to prospective clients at Lewis Alexander Financial Management, we find that most people think that because they are meeting the minimum payments on credit cards that they are not actually in debt!

  • This is a very common misconception regarding how credit cards work and to actually reduce credit card balances you must pay more than the minimum required.

When people say they are not in debt, they are advised that the meaning of debt is something owed such as money, goods or services. It is an obligation or liability to pay or render something to someone else. The minute you borrow money you are technically in financial debt.

Personal Debt Test

The higher your credit card balances become the harder it usually is to keep up with the repayments, this is because they are compounding with interest at such a rate that you cannot start to pay down anything more than the minimum because the repayments are eating too much of your monthly income.  This is the pattern the credit card companies make more money from and if everyone repaid their credit card balances in full every month the credit card companies would make little or no money at all.

All you are doing by paying the monthly minimum payments on credit card debts is actually renting the debt from the credit card company!

This is the cycle of debt that people find themselves in and when they then incur a further change in personal circumstance it tends to create a personal financial problem.

Lewis Alexander has helped many people over the last 10 years to start to and finally clear personal credit card debts and personal loan commitments.  If you do not take action and solve your financial problems they will also compound and increase in severity.

The sooner an individual seeks the financial help or financial advice required and commits to a plan of action to reduce the debt, the better it is for their financial future.  People who do not take action immediately tend to be unable to explore personal debt solutions that could have been initially available to them.

If you are struggling to manage credit card or loan repayments and need help to clear the debts and start reducing what is owed, please contact our personal debt helpline today in absolute confidence using

  • 0800 018 6868
  • Lines are open 24 hours / 7 days
  • Calls are usually FREE from UK land lines
  • Calls from mobiles may be less expensive if you dial 0161 872 3383
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