Wednesday 16th of September 2009
Individual voluntary arrangement (IVA) advice could support those Britons who have complained to the Financial Ombudsman about their credit card lenders.
During the 2008/09 year ended March 31st, the ombudsman received 18,590 complaints about credit cards, an increase from the 14,123 complaints received the same time the previous year.
Many of the complaints were about default charges, where a customer exceeds a credit limit, misses a repayment or meets their plastic commitment late.
When credit card balances become unmanageable, Britons may want to seek IVA advice as soon as possible, rather than letting the default charges pile up.
Indeed, an IVA can group all credit card balances into one monthly yet more manageable repayment, which could mean consumers no longer have to miss a bill.
The ombudsman report says: "In last year’s annual review we mentioned an emerging type of complaint, where credit card companies made substantial increases - sometimes by as much as ten percentage points - in the rate of interest charged on certain customers’ credit card accounts."
An IVA can, however, freeze the interest rate on credit card balances, which could help Britons meet their repayments more successfully.
By Rachel Powell
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