Pay more towards debt

For the most part, credit cards are easy to get, and easy to use, but before you know it the total can be more than you expected.

£20 here and £10 there – it all adds up.

If you’re savvy, you’ll get a credit card with added benefits, like cashback, or points towards loyalty schemes. In addition, you’ll have the money ready to pay off the debt at the end of the month, so you won’t have paid any interest.

If this is the case, then good work!

However, if you’re the kind of person to keep the debt rolling from month to month, only paying the minimum, then you’ll be paying the debt down for a lot longer than you expect.

Credit Card companies typically will set the minimum repayment between 2% – 5% of your outstanding balance. At some points, this will only just pay off the interest and not make a dent in your actual debt.

How your repayment affects how the interest charged
Name Amount Repayment APR Total Paid Total Months Total Interest
Example 1 £4000 2% 19.9% £15,505 53 years 5 months £11,505
Example 2 £4000 3% 19.9% £7,906 21 years 3 months £3,906
Example 3 £4000 5% 19.9% £5,693 10 years 7 months £1,693
Example 4 £4000 10% 19.9% £4,702 5 years £702
Example 5 £4000 £250 19.9% £4,620 1 year 7 months £620

The reason for the high amount of interest is because the minimum payment is a percentage of the total balance, which means the amount repaid will decrease every month.

Bottom line: Set up a fixed monthly payment with your credit card issuer. Ideally at least 10% of your balance.


Whilst building web applications, Daniel also sets up web servers from scratch because he has yet to find the perfect hosting solution. His philosophy is “Why settle, when you can build it better yourself?”

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