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Bigger credit card repayments reduce debt, says moneysupermarket.com

Tue, 26 May 2009

Those who make larger repayments on their credit card debt will reduce the amount they pay in the long run, according to moneysupermarket.com.

The price comparison site said that only making the minimum credit card repayment every time one is due will lengthen the time spent paying money back, as well as increasing the amount of money owed.

Citing a hypothetical £1,000 on a 16.9 per cent credit card, the site said that a customer repaying five per cent over 12 months will rack up £30 less interest and will reduce their balance by £320 more than someone paying only three per cent.

Peter Harrison, credit card expert at moneysupermarket.com said: "If you opt to increase your repayment amounts you will reduce your debt and the interest paid significantly."

Recent research by financial advice website MoneyExpert.com revealed that credit card rates are at their highest since the beginning of the credit crunch .
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