The total UK credit card debt in January 2017 was £66.7 billion. That works out to £2470 per household. For a credit card with the average interest rate of 18.9%, it would take 25 years and 10 months to repay if only the minimum repayment was made each month. This would start at £59 per month and decrease as the balance went down.*
The total repayments would be the £2470 debt PLUS £3,400 interest = £5870
That means that the purchases made for £2470 actually cost £5780 and the debt would hang about for nearly 26 years! Please know this – credit card companies fix the minimum payment for their benefit, not yours.
By fixing the monthly repayment at £100, the same £2470 debt, on the same credit card would take 2 years and 7 months and cost £611 in interest = £3071. That means keeping £2709 instead of handing it over in interest, whilst also having 23 years and 3 monthsof your life free of this debt!
Paying the minimum payment on a credit card means you have become a slave to it. As a money coach, I see credit card slaves on a daily basis.
So if you have debt on a credit card, why not have a good look at your statement and become very clear as to how much you will be paying and for how long?
Please don’t be a slave to your credit card. Get clear, as clarity is the first step to financial freedom.
FFFighter.com – The Financial Freedom Fighter showing you that there is another way…
Fanny Snaith, Financial Freedom Fighter® – Money Coach, practical and mindset.
*Information from The Money Charity March 2017