Credit cards have to be paid back. Don’t have one unless you earn enough to cover the repayments plus interest.
Many credit cards charge an extortionate rate of interest, and most only require that you pay a small percentage of the outstanding balance each month (typically 2, or 2.25%).
Remember, it’s in the interest of credit card companies for you to pay off as little as possible each month, that way they gain hundreds, or thousands of pounds in interest.
- £1000 borrowed on a typical 17% APR credit card becomes £1270.95 after 2 years if nothing is paid. That’s over £270 extra you’ll have to pay off!
- if you pay back the minimum rate of 2% of this each month, it will take you over 26 years to pay it back, at a total of £2882.19
Message supplied by: Paddy @ Eternity Norwich