Credit card users could soon see minimum repayments soar on their debts to £25, which could push many struggling households over the edge.

Later this year Alliance & Leicester credit card customers are set to see minimum repayments on their plastic change to the greater of ¬£25 or ¬£5 plus any interest charges Рfrom the lesser of 3 per cent or ¬£5 plus any interest charges.

This increase will concern many households whose budgets are already over stretched, in particular lower-income households who could find their monthly repayments leap to unmanageable levels.

The company that provides Alliance & Leicester with its cards, MBNA, will roll out the same changes to the other lenders it supplies, including Virgin Money and its own-brand customers.

MoneyExpert’s Sean Gardner says: ‘Such a move could cause problems with people who are managing their debt carefully, especially when everybody’s income is so much tighter.’

‘And because people are becoming more stretched, an increasing number are now paying back the minimum.’

Chiltern’s Nathan Gladwell says: “Whilst this is a good thing for many borrowers – as they will be repaying more of their debt back quicker – for others it could spell disaster.

“Those who are already overstretched could find that they need to reschedule debts to a more affordable level to cope. Companies such as Chiltern can assist with this, by offering an impartial solution, like informal debt management.

“These arrangements enable customers to repay debts but at a rate that they can afford, whilst still having enough money to cover all of their priority debts and essential items.”