Latest research from The Debt Advisory Centre suggests that one in five credit card customers only paid the minimum payment from their monthly card statement in October and that one in twenty failed to pay anything.
The Debt Advisory Centre said that the figures were worrying as its research was carried out before the costly Christmas period when people are more likely to spend on their plastic.
It said that younger borrowers (18-24) found it hardest when it came to paying their credit card debt, with only a quarter managing to meet the minimum payment in October and 13% admitting they missed it completely, leaving them facing a bigger interest bill plus a £12 fee for non-payment.
A customer paying the minimum payment off a £2,500 balance on a typical credit card with an APR of 18.9% will take more than 25 years to clear the debt, , and pay more than £3,000 in interest during that time.
Customers that fail to make the minimum payment will suffer in the longer term as any late or missed payments are recorded on the customer’s credit history, potentially making it more difficult for them to obtain credit at a later date.
On a more positive note the Debt Advisory Centre also found that half of cardholders did pay off their entire balance every month, and one fifth of respondents said they paid off more than the minimum payment but less than the full balance.
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