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Credit card holders should repay 3 per cent

Wed, 26 Jul 2006

uSwitch, the comparison site, has called on credit card holders to pay off three per cent of their total bill.

Research from the site has found that credit card consumers could save a collective £75 billion by paying three per cent rather than two per cent of their total balance.

uSwitch also revealed that 3.4 million people with credit cards could save £2,000 in interest repayments by adopting this tactic, arguing that the difference between the percentage rates is effectively double the interest the credit card holder is required to pay.

Commenting on the research, Nick White, head of personal finance at uSwitch, explained: "By reducing the minimum repayments to a level that make credit cards seem more affordable and allowing customers to repay smaller amounts each month, borrowers are retaining their debt over a much longer time frame and paying more interest ."

As such, the comparison site is calling for several changes to the credit card market .

These include all minimum payment rates to be set at three per cent, the length of time that it would take credit card holders to pay off their balance should be printed on the statement and that credit card lenders should allow card holders to pay more through direct debit.

uSwitch provides comparison information on a range of services - including loans , broadband services and for a range of utilities .

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