Increase Credit Card Repayments To Reduce Debts, Expert Advises

Fri, 29 May 2009

Credit card holders have been urged to make larger repayments in order to reduce their debts at a faster rate .

According to Peter Harrison, credit card expert at moneysupermarket.com, consumers making minimum repayments on their credit cards will not only take longer to pay off their outstanding debts, but will also see the amount of money they owe increase considerably.

For example, a customer repaying 5 per cent of their credit card debt will see their interest cut by £30 and their balance fall by £320 more on a £1,000 credit card with an interest rate of 16.9 per cent, compared to a person repaying just 3 per cent of their debt .

Mr Harrison advised credit card customers to increase their repayments if they want to save more in the long run.

Meanwhile, research from UK payments association Apacs revealed that more Brits are using their debit cards to make purchases instead of their credit cards in a bid to reign in their credit card spend during the recession.

However, Apacs director of communications Sandra Quinn said: "It is hard to say if we are seeing a shift towards people spending what they have, rather than what they can borrow ."
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