The shocking truth behind paying back the bare minimum

December 21, 2006

Recent studies have shown that if you spend £360 on your credit card and if you only choose to pay back the minimum each month, you could be extremely shocked by the overall amount of time you will be paying it back!

You imagine that a £360 debt would usually at the most, cost you around £600 with a high interest and that would cause you to be in debt for a year or two at the most. However, it seems that £360 could take almost 11 years to pay off!

For such a small amount of debt that is a huge amount of time to spend paying it off! The news will also shock many people this Christmas as most people spend at least £360 on their credit cards buying presents and wrapping paper as well as other festive treats.

So what can you do to stop yourself from having to pay such extortionate prices? Well, according to moneysupermarket.com, you have to start taking advantage of the cards which offer zero percent interest. You can easily switch credit cards and switching to a card which does offer zero percent interest for a certain amount of time can really help.

Most credit cards do seem to charge around 15 percent interest on all payments which is why it seems to take so long to pay the debt back! Not many people pay off more than the minimum payments each month and that means that you are only paying off a little of your debt each time. So, whilst paying off the minimum is an attractive offer because that is what you originally signed up for, it does mean that you only pay off very little at a time. Often, people are only paying off their interest every month instead of actually touching their debt and that way you will be paying the debt off a lot longer than ten years!