Moneysupermarket reveals UK credit card debt
More than six million people in the UK have had an outstanding balance on their credit cards for more than a year, according to new research. Moneysupermarket.com revealed that 41 percent of people with credit cards in Britain have had an outstanding balance for a year of more, while a gob-smacking 14 percent claim to have been in debt for more than five years.
Three million people, or almost nine percent of all card holders, also admitted to only paying off the minimum each month. Experts have warned that this is a risky business, as while it may seem like you are only spending a small amount each month, with interest added on top, the final total skyrockets.
In a shocking example, someone only paying back the monthly minimum of an amount of £1,000 would take 17 years to repay their debt if charged at the average 18.13 percent APR. They would pay back no less than £1,113 in interest – much more than originally borrowed.
Experts have called for a drive to make sure consumers understand their repayment structures after it emerged that, on average, it takes card holders a shocking 21 months to pay back debts.
Moneysupermarket’s head of banking, Kevin Mountford, said that in the current economic climate, it’s more important than ever to make sure you don’t get stung by costing interest charges. He added that anyone with an outstanding balance should switch to a card offering zero percent interest as credit cards are not designed for long-term lending.