UK Money News
28th November 2007
Unnecessary interest payments hit £3bn
Credit card holders are wasting a total of £3 billion every year in unnecessary interest payments, new research warns.
The average credit card user carries over £1,137 on their cards every month, a study by Fool.co.uk has shown, with Brits owning an average of two or three cards.
Payments accrued are often unnecessary as many credit card holders have the funds needed to pay off their credit card bill sitting idle in current accounts or savings accounts.
On average, we have £869 in our current account - enough to pay off at least some of that debt and avoid interest payments.
The study also found that one in six people with £400 to £500 on their credit card had £3,000 or more in savings - more than enough to clear their debt.
"We are often told to put aside money for a rainy day because having a ready source of funds for emergencies is a sensible thing to do," commented David Kuo, head of personal finance at Fool.co.uk
"But it makes little sense to have a stash of money earning interest at six per cent a year when a pile of debt is burning a hole in our finances at 15 per cent annually."
Recent finance news from Abbey suggests that 18 million UK consumers use their cards at least once a week.
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