Keeping regular credit card payments and loosing money by doing it? Is it possible? Unfortunately, yes, as a comparison website Moneysupermarket.com reported recently. A survey, carried out by the site, revealed that nearly 10% of credit card holders regularly pay off only the required minimum on their credit card debt, thus potentially losing a possibility to substantially reduce interest repaid. More than that, 40% responded that they keep outstanding balances on their credit cards for a year or more.

A simple example can illustrate what is meant here. If you borrow £1,000 at 18,3% APR (Annual Percent Rate) and pay only the monthly minimum, it will take you 17 (!) years to clear the debt and the total interest repaid over this period would be £1,113 It is easy to see that taking so much time to repay you end up actually paying more than double.

But there is an even bigger sin that many commit – forgetting to keep up your credit card minimum monthly payments at all. In this way you are sure to lose a small fortune as even one day of delay might result in automatic penalties and interest charges. Even worse, it will negatively influence your credit rating which is sure to make obtaining future loans and mortgages more difficult.

Be especially careful with store cards, such as Tesco’s and Sainsbury’s. They look incredibly attractive at the beginning but beware: once the initial period of their special offers and discounts ends, interest rates that are applied are shockingly high.

The reality is such that in the current situation of total economy and expenditure cuts it is not affordable any more NOT to understand how credit cads work and what kinds of interest rates apply and when. Credit cards have never been intended for long-terms lending since interests are high. The sooner the credit card debt is paid off, the better. Also, it always pays to be well-informed and to realize when it’s time to switch an outstanding balance to a zero interest credit card or to take action and clear your credit card debts by taking a consolidation loan.