Most of us have used credit cards, and paid the extortionate interest from time to time, and maybe even the default charges. Credit can be useful, but charges for credit can be a disaster. I’ve already made one change, so that if you don’t pay by card, you will save money at the shop. Next, interest rates need to be limited, as they were in England in the past, and indeed, as they still are in France. The very maximum allowed here is 20,56%. The highest rate for a loan secured on property is 6,48%, (for a bridging loan). Even Bank on Dave charges nearly 30% in some cases, but loans with rates of over 4000% are advertised on TV in the UK. The maximum rate should be 20% above the bank of Enland rate.
It is very difficult to get rid of a credit card, because once you’ve paid this months instalment you don’t have actual money left to buy groceries, so you need to use your card. This limits your choice. You can’t buy off anyone who doesn’t take card. So this is the proposition. If you give up your credit or store card, the issuer of the card must give you a month with no interest and no payment due, and then the interest will be reduced to 1% per month. You will pay at least 3% (1% interest and 2% off what you owe). The lender will refund any default charges over the last 2 years and capitalise any arrears. After a year you payments will stay at the same level per month so that the balance is paid off in about 4 years. The issuer of the card must offer you a card which is debited in full immediately, or once a month. He may charge a fee of up to £25 a year + 0,75% on debits, for this, but no other fees or interest to you or the shop.