Credit card problems 'to be caused by postal strikes'

21/09/2009

Customer bills could be received late thanks to ongoing local strike action from postal workers.

Around £150 million extra could be paid on credit card debt due to the problems, the Sunday Times reported.

The newspaper derived its figures from the fact that card providers commonly charge an extra £12 per month for late payments.

Data from UK Payments Administration show that more than half of credit card customers do not cover their minimum monthly payments via Direct Debit.

Assuming that all of these consumers miss their deadlines as a result of receiving late mail from the strikes, total fees of £157.2 million would be levied.

Energy bills might also be received late due to the strikes.

Commenting on the issue to the newspaper, Clare Francis, editor of moneysupermarket.com, said: "The mail backlog could generate millions of pounds in charges for card providers.

"It could be worth agreeing to pay at least the minimum repayment by direct debit to make sure you're not affected."

EuroDebt director Kevin Still said: "Our vulnerability to be financially penalised depending on the method of payment remains very much in the public eye, whether this be because of a postal strike or energy providers tariffs on direct debit. In this instance finding a reliable and fast method of getting funds credited to your credit card or utility account is important."

He added: "On-line, telephone and direct debit payments would seem to be the most obvious ways of dealing with these risks. Some consideration should be given by creditors where postal strikes are impacting millions of accountholders. Most creditors have fairly sophisticated systems that can be readily adapted to allow for flexibility before payment chasing starts and penalty charges apply.

"EuroDebt has established a simple, no surprises prepaid current account to deal with this type of problem. The account is available to all UK residents without the requirement for a credit check. There are no charges for failed direct debits or standing orders. The account is available for people on a Debt Management Plan, an IVA or even bankruptcy."

Employees of the Royal Mail are currently voting on whether or not to launch a coordinated national strike, as disputes over pay and job cutbacks at the organisation continue.

Tags; Debt Management and Banking, Credit Card Lifestyle, Recent Graduate Debt,

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