People should make sure they use their credit card wisely to avoid unnecessary expense, one expert has warned.
Michelle Slade, analyst at Moneyfacts.co.uk, explains that if people only make the minimum payment each month on their credit card then they could pay almost than twice as much for their purchases.
She said: "If you spent £3,000 on a credit card charging 15.9 per cent APR and repaid the minimum of 2.5 per cent, min £3, you would end up paying an additional £2,729.16 in interest and it would take you 25 years and 2 months to repay the debt ."
Even if people take out a credit card with a zero per cent introductory rate on purchases they will end up paying over the odds if they do not clear the balance quickly, she added.
By paying even just a small percentage more than the minimum payment, people can save thousands on their credit cards, Ms Slade stated.
Recently, Richard Brown, chief executive of moneynet.co.uk, advised that graduates should pay off expensive debts such as credit cards first, before looking at their student loans .
News Side
Warning over credit card payments
Thu, 26 Jun 2008
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