Financial website gives credit card tips

09/06/2009

The length of time it takes to pay back a medium-sized credit debt in full if only minimum payments were made has been exposed.

Lovemoney.com, a financial site, put together calculations showing that a £2,000 balance on a card carrying a 16.8 per cent APR would take 35 years to pay back.

This assumes that a typical minimum of just two per cent of the total balance was paid back each time.

What's more, the report showed that an extra £4,080 in interest would be paid back on top of the original balance.

Lovemoney.com advised customers facing debts to transfer to a zero per cent credit card if possible.

The borrowers were then told by the site to save as much money as they could in a high-interest deposit account during the zero per cent introductory period - and then pay back as much of the original bill as they could when the deadline approaches.

"While a balance transfer credit card may seem great, those who take one out should be confident that they will save diligently during the zero per cent period," Lovemoney.com said.

"Fail to do this and you could end up with a whopping bill."

Recent EuroDebt figures show that clients carry three separate credit card balances, with a typical balance of £3,600 per card.

Tags; Debt Management and Banking, Credit Card Lifestyle,

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