CCCS: pay off more than minimum on monthly balances

Most consumers use their credit and store cards wisely and avoid getting into debt, a charity has said.

However, the Consumer Credit Counselling Service (CCCS) warned that those who pay off only the minimum balance each month are heading for trouble.

New regulations in the form of the Consumer Credit Act have led to more transparency on the part of credit card
providers and this has allowed consumers to become more aware, a spokesperson for the body has said.

According to the CCCS, around 50 per cent of credit card
holders pay their balance off in full every month.

However, the charity warned that just paying the minimum amount is “really a mug’s game – that’s the main thing that leads people into debt”.

“If you borrow £2000 on the average credit card, never borrow another penny and just pay the minimum amount, it’s going to take you twenty years to clear that,” said spokesperson Frances Walker.

In related news, the Bank of England recently raised the base rate of interest by a quarter percent to 5.5 per cent.

© Adfero Ltd

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