Card firms cash in on missed payments

Credit card customers have paid out up to £50 million in penalty fees for missing payments in the past six months, new MoneyExpert.com research shows.

Up to 4.1 million monthly payments on credit cards have been missed or paid late in the past six months, the independent financial comparison website says. That works out at around 694,506 repayments missed a month.

And MoneyExpert.com is urging card customers who are struggling with debts to take action now or risk further penalty fees and ultimately damage to their credit rating.

Around nine per cent of credit card bill payments have been missed in the past six months, MoneyExpert.com’s research shows. Credit card firms charge £12 a time for missed payments after action last year by the Office of Fair Trading to cut high penalty fees.

Sean Gardner, Chief Executive of MoneyExpert.com, said: “This is the latest evidence of how many people are struggling to cope as interest rates start to rise.

“Missing a credit card payment comes at a financial cost of £12 a time and if you are already struggling to meet your monthly bills that will just add to the pressure.

“And there are other costs to consider. The effect of missing one credit card payment can last as long as three years. That is how long the mistake will stay on your credit file and it will be used by firms to decide whether they’re going to lend you cash and what they’re going to charge.

“Someone with a poor credit rating will be charged more and may get turned down when they want to borrow.

“Anyone in trouble needs to take action now because the situation will only get worse if they bury their heads in the sand. They need to get their debts under control and cut their spending.

People aged 25 to 34 are the most likely to have missed credit card bills – around 13 per cent have missed payments in the past six months.

Around 11 per cent of people in the Midlands and Wales have missed card payments while just five per cent of Scots have done so.