Thursday 24th of September 2009
While shoppers with significant debts on a number of store cards may have in the past asked for individual voluntary arrangement (IVA) help, it appears that consumers who do not fall into the red may soon find they do so.
Thousands of shoppers who repay their store card balances could be hit by fines after Santander Cards - which runs the store cards for Laura Ashley, House of Fraser, Topshop and Debenhams - changes its conditions.
A fee of up to £10 will be levied on store card customers who are in credit for three consecutive months, which would impact upon shoppers who return an item and do not purchase anything else.
Indeed, shoppers who have a large number of store cards could soon find the fees adding up every month, which could plunge some households over the edge and into debt, especially if there is little disposable income to hand.
When all of a household’s income goes on paying off debt and meeting bills, IVA help could be required to help Britons free up some cash. The interest on store cards and other unsecured debt is frozen with an IVA, meaning that after repayments are made, some money could be left over.
By Hayley Jones
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- Information on IVAs may provide much-needed financial education to Brits
