It has emerged that the financial giant HBOS wrote to its cardholders informing them that, with effect from 1 October, their MMR would be reduced from 2% to the greater of:
1. 1% of the outstanding balance; or
2. an amount equal to the interest and insurance premiums charged, plus any penalty fees, plus £5
At first glance, this looks like a positive step – a lower monthly repayments can help to reduce financial stress in the Money Crisis the world is in at the moment. But on a closer look you will find that this step can transform modest debts into a lifetime of slavery because at 1% MMR (Minimum Monthly Repayment), a £1200 balance can take almost 2 decades to clears completely.
Don’t lend yourself to slavery. Make your own plan, follow it through and get out from under your credit card burden. If you want to pay your cards off quickly, pay a lot more than the MMR.
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Well said, finally a good report on this stuff