Credit Card Interest Burdens Those in Debt
Credit card interest is costing indebted Brits £2.3 billion, new research reveals, making it harder for them to pay off the actual debt.
According to Moneysupermarket, £2.3 billion a year in interest payments is being wasted by those with debt letting it sit on their existing credit card.
Almost half of all credit card users do not pay their bills off in full, with the average debt being held for up to 10 months before it is completely paid.
A further three percent pay just the minimum each month, making it even harder to pay off the debt as interest mounts.
“As the nation’s wallets continue to be squeezed by higher living costs, it is crucial consumers look to pay off their debt quickly and efficiently to prevent additional interest from accruing,” said Kevin Mountford, Moneysupermarket head of banking.
“You need to look at all of your outgoings and try and get a target for paying your debt down.”
The study also showed that 64 percent of credit card users had never eased the burden of interest on their debts by transferring an existing balance onto a zero percent balance transfer card.
Those who had not made the switch admitted they could not be bothered, as 24 percent claimed, while others did not understand how to do it.
Over a 12 month period, those with existing debt could save themselves about £279 in interest, as calculated in the study.
Around one in five credit cards users are concerned over their current level of debt.
Research by Unbiased confirmed the problem high interest rates have on how quickly those in debt can pay off their balances.
They revealed the first 45 days of the year are spent by the majority of Brits simply paying off the interest that has accumulated on their debts, with many not earning enough to be able to touch the actual debt before the 15th February.