4 September 2008
Credit card customers are being urged to pay off their balances as soon as they can and avoid making minimum repayments each month. According to uSwitch.com, repaying a balance of £1,384 could take up to 31 years if only minimum monthly repayments are made. The independent price comparison and switching service points out that the average minimum repayment has fallen in the last 12 months, from 2.65% to 2.54%. At the same time, credit card spending is on the increase, rising by an average of £179 million per quarter over the last year. This means it is likely to take even longer for those making just the minimum repayments to clear their credit card balances. Simeon Linstead, Head of Personal Finance at uSwitch.com, said it is understandable that as the cost of living continues to rise consumers will be tempted to repay the absolute minimum. However, he added: "Those that opt to manage their credit card debt in this way could end up paying far more than they need to for every purchase made." A recent survey PayPal revealed that 20% of credit card customers use plastic to meet daily living costs at least once a quarter.
© 2008 Adfero Ltd
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