Many people never take the time to consider how much they spend on their credit cards in our lifetime – and it’s no surprise: The point of plastic is that it’s easy; it’s always there and you don’t have to think about it.
However, if you do not pay off your credit card in full every month, then it is always gathering interest, even when you’re not thinking about it; which means that if you’ve left your bills alone for long enough you might be surprised to learn how much money you have been simply throwing away over the years.
Research conducted by the Telegraph newspaper suggests that many people in the UK could be paying out as much as £40,000 to their credit providers in interest alone – and that’s just on the plastic. The newspaper also suggests that the people who allow this level of debt to accumulate on their credit cards also have a greater propensity to take out other types of loans, such as personal and payday loans, and move into other lines of credit.
According to the Debt Advice Foundation – one of Britain’s leading debt help charities – people on average have reached £23,000 of debt before they seek help, which is certainly a frightening statistic.
According to Will Becker, Managing Director of leading credit card comparison site TotallyMoney.com, it’s even more surprising considering the number of deals available on credit cards for the likes of 0% interest balance transfers.
He said: “Far too many of us sit with a balance on the wrong credit card. We’ve got used to switching car insurance every year and saving a packet, now we need to think about our credit cards the same way. The banks are falling over each other to get us to switch to record-breaking 0% deals: we should take them up on their offer. The average person saves over £500 when they do. The danger of doing something about our card debts now is that action is put off for years or decades and the drip, drip of monthly interest eventually adds up to a small or even large fortune.”
This could certainly dispel the myth that nobody is willing to lend money, but it also enforces the fact that people should shop around and seek out the best deals for themselves to avoid amassing too much interest.
Have Credit card debt?
Use this calculator to work out how much it is costing you!
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Some even say you should cut up your credit cards altogether and just use your debit card to save yourself…but I’ll leave that judgement up to you!