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Increasing payments 'cuts card repayment time'

By Sarah Engle, Tue 9 Mar 2010 - Published in Credit Cards

Credit card holders can reduce the time it takes to clear their debts by increasing their monthly repayments, moneysupermarket.com has pointed out.

The price comparison website noted that the average outstanding credit card balance is £1,989 - which would take 22 years and ten months to clear if relying on minimum repayments of 2.5 per cent.

However, the organisation explained that repaying an extra £10 per month would take the repayment time to eight years and seven months, while £20 above the minimum will reduce it to five years and seven months.

Peter Harrison, credit card expert at moneysupermarket.com, said: "We know that times are tight for many households and some credit cardholders may just be repaying the minimum amount every month as a way of trying to minimise their outgoings."

He added that people should seriously consider paying more than the minimum and said those who cannot should think about visiting a debt advice charity such as Citizens Advice or CCCS.

Last month, moneysupermarket.com claimed that ten per cent of Brits, or around five million people, permanently live in their overdrafts.