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Festive shopping with credit card 'more costly'

Festive shopping with credit card 'more costly'

• Pay off those credit cards with a remortgage or loan

 

Paying for Christmas using a credit card will turn out to be more costly for consumers in the long run, it has been argued.

Moneyfacts has revealed that the cost of borrowing has risen "significantly" in recent months and credit card charges are going up despite the Bank of England's interest rates reductions.

Borrowers may struggle to repay balances before interest-free offers expire as seven providers have cut the number of zero-interest days customers receive, it stated.

And 16 credit card companies have increased their purchase APRs, it added.

Consumers are set to be "stung more than ever before", remarked analyst Michelle Slade.

She advised people to avoid making the mistake of only paying back the minimum amount outlined on credit card statements.

"If you can't repay in full, then even paying a small amount over the minimum could reduce significantly the amount of interest and time to repay the debt," she said.

Meanwhile, Alliance Trust has claimed that the finances of UK households have dropped to a "record low".

Your home may be repossessed if you do not keep up repayments on your mortgage.

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