Moneyfacts.co.uk: Credit can double on minimum repayments

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Moneyfacts.co.uk: Credit can double on minimum repayments

Shoppers who pay back only the minimum monthly repayment on their credit card could end up paying more than twice as much for their purchases, Moneyfacts.co.uk is warning.

The independent financial adviser said that many families may turn to credit over the summer as disposable income was reduced.

It explained that £3,000 spent on a credit card charging 15.9 per cent APR, repaid at the minimum 2.5 per cent of £3, would lead to an additional payment of £2,279.16 in interest – and take over 25 years to finish.

Repaying £100 per month on such a card would save over £2,000.

Moneyfacts.co.uk also noted the Halifax All in One MasterCard which offers 0 per cent on purchases for ten months.

The website warned that by repaying the minimum, shoppers would end up "worse off than if they had used a card without such a deal".

Website The Thrifty Scot recently reported an increase in complaints made about credit card complaints.

It said that a report by the Financial Ombudsman Service had found a record number of complaints in the past year, with some customers finding their interest rates or fees being increased for no reason.
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