Credit card statements: The new way to manage debt?

The introduction of new annual credit card statements may play a pivotal role in helping consumers manage their debt.

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The new statements will give some 31 million credit card holders in the UK a detailed breakdown of fees they have incurred during the year.

Identifying spending patterns may go some way towards giving consumers a clearer picture of their spending habits.

Organised by a partnership between Department for Business, Innovation and Skills and the UK Cards Association, the initiative is intended to give consumers wider access to the details of their credit card purchases.

Sylvia Waycott, from Moneyfacts, says: “The principle is good, and if someone opens an annual statement and sees that over the last year they have been charged £400 interest, it may be the catalyst to a change of how they use their card, the regularity of repayments and how much they repay per month in order to bring the interest charges down.”

The statements will also detail interest and charges paid, possibly prompting some consumers to take a better hold on their finances.

Kevin Mountford, banking expert at MoneySupermarket.com says: “Having a clearer understanding of the way a card is used should encourage better future usage, and at the same time, empower the card holder to shop around.

“Although annual statements should better inform customers by highlighting where they are falling foul of terms and conditions, as well as showing how a card might not be servicing their needs, it is still up to the individual to act on that information.”

Consumer champions Which? argue that the usability of the document will depend on it being jargon-free and easy to read.

Waycott also goes on to say that it may be difficult to compare statements if they are issued for different time periods.

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