Millions wasted on credit card debt payments

Brits are squandering millions every year on unnecessary interest payments on their credit cards, despite also saving money for the future.

Recent research by Fool.co.uk has found that around one in every six people with an average of £450 pounds worth of credit card debt are simultaneously saving £3,000 for a “rainy day”.

British cardholders pay an average of £165 annually on interest, with an outstanding balance of £1,100 at 15 per cent. Meanwhile they are earning just £66 interest on savings accounts at six per cent.

David Kuo, head of personal finance at Fool.co.uk, commented: “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 – and it is.

“[However], saving money before you have paid off your debts is like trying to fill a bath without putting the plug in first. It’s a pointless exercise that results in a waste of water, an empty bath and hefty water bills.”

Those aged between 34 and 41 are the most likely to be saving at the same time as paying hefty interest on credit card debts.

Tags: home, emergencies, interest payments, future.Recent research, fool, pointless exercise