Millions have a year or more of debt on their cards

It has been reported that millions of borrowers in the UK have outstanding credit card debts of a year or more, with many only managing minimum repayments on their debts in the current outstanding climate. According to the report more than six million people have had an outstanding balance on their credit cards for at least a year.

Research was carried out by moneysupermarket.com, and officials from the firm claim that almost 10 percent of people admitted to paying only the minimum amount off on their credit card debts each month. This has resulted in 14 percent of cardholders having debt on their credit cards for over five years, with the minimum repayments barely covering the interest on their debt.

Industry officials have warned that those paying off their debts with just the minimum repayment each month will not only spend years longer repaying the debt but will also pay a huge amount in interest over the term of the debt. However, in the current financial climate following the credit crisis and recession many cannot afford to pay any more than the minimum.

The average length of time that a balance is left outstanding on a credit card according to the survey results is twenty one months, and officials want to ensure that consumers understand the repayment structure and the consequences of minimum repayments.

An official from Moneysupermarket.com said: ‘Our research reveals credit cards are still playing an important role in the nation’s finances, but in the current climate, it’s more important than ever for consumers to understand the cheapest way to borrow on their cards and avoid getting stung by high interest rates. The most important thing is that consumers understand the implications of borrowing on a credit card and that paying back the minimum amount each month will dramatically increase the total amount they pay back in the long run.’

Tags: Credit card, Credit Cards, debt, credit, cheapest way