We use a minimal number of cookies to enhance your browsing experience - you can change your settings at any time.
The UK's only Multi Agency Credit Report

Take a FREE 30-day no obligation trial of the UK's best rated credit report service.

Forgotten Password? Sign Up

FREE Multi Agency Credit Report

See more than twice the information compared to any other UK Credit Report

Our Credit Report Monitoring service features:

Multi Agency Credit Reports

FREE checkmyfile Credit Scores & Ratings

FREE Identity Theft Assistance

Independent, Impartial, Expert Advice

See your Credit Report FREE

30 Day Trial - Cancel Anytime


More about Multi Agency Credit Reports

Many underestimate true cost of credit card borrowing

Posted in 'Personal Finance' by Kirstie Brown

02 April 2015

Working out how long it will take you to clear off your credit card balance can take some serious skill and can confuse us. As a result, some people are left with repayments for much longer than they anticipated and the full cost of the credit card remaining unknown.

According to research carried out by credit card provider Ocean Finance, many failed to correctly estimate the length of time it would take to clear off the balance of £3,000 on an 18.9% APR with a fixed payment of £50. Nearly a quarter underestimated the amount of time it would take, suggesting that the balance would be clear in only 5 years and 11 months. In reality, it would take 11 years and 11 months by making the minimum monthly payments of £50.

Another calculation that people trip up over is how much interest they would incur in total when paying off the balance. A worrying 1 in 5 believed that they would only accrue a miniscule £403 in interest - the actual figure is approximately £4,120 for the initial £3,000 borrowed.

Ian Williams of Ocean Finance says, "It is concerning that so many people don't really understand the true cost of using their credit card. While most people do aim to clear the balance in full, paying just the minimum each month, or slightly more, can mean you'll be paying off your credit card balance for many years”.

If you are in a position to do so, it is worth taking control and clearing the balance on your credit card for good. One way to do this is by using a 0% interest balance transfer card. These can help you to pay off the outstanding balance without racking up additional interest, as long as the balance is paid within the interest-free period. Some cards now offer up to 36 months of 0% interest, but can sometimes carry higher fees and have higher APRs after the introductory offer ends.

Once you have cleared the balance and you are credit card debt-free, it is worth carefully weighing up the figures on any future cards you take out, and try to pay off as much as you can – a little bit of careful planning can go a long way.

Kirstie Brown

Kirstie has a degree in Forensic Science from Bristol University, West of England. She is a qualified lifeguard, and a keen runner, having completed the Great South Run twice. Kirstie writes on all topics related to credit.

Kirstie is a Senior Credit Analyst at checkmyfile.

Related Articles

Is a credit building card a good idea

A credit building credit card is most often used by people that are either looking to improve their credit rating or take out their first credit card.

Credit building cards give you access to credit when you have had problems with mainstream lenders and they can also help build your credit history, to ensure that the next card you get could well have a more competitive APR or an interest-free period.

While many people can understand why they may have difficulty getting a card from a provider like Halifax or American Express when they have a poor credit history, those who have never had need for credit often find themselves being rejected by this .....

24 Mar 2017 by

Kelly Luff


Personal Finance

Full Article

Which Credit Report Information Can Landlords See

Many prospective tenants worry about passing the credit checks carried out by landlords and letting agents. Will they see late credit card payments? Will they be aware of how much debt I currently have? Am I going to be homeless if they see that I have a default?

Fear not. Landlords and letting agencies in the UK do not have the required consent to search your full credit file - they will assess the publicly available information such as Electoral Roll and Court Information that is held by the credit reference agencies, potentially along with other data such as employment confirmation .....

7 Mar 2017 by

Kevin Pearce


Personal Finance

Full Article

Impacts of late payment on your credit card agreement

We’ve all done it before – had that mad panic when we’ve forgotten to pay a bill. But what happens if you do forget to pay your credit card by the monthly repayment date?

20 Feb 2017 by

Kelly Luff


Personal Finance

Full Article

Accepted Payment Methods: VISA, MasterCard and Direct Debit

© Copyright Credit Reporting Agency Ltd 2000 to 2017. All Rights Reserved.

Authorised and regulated by the Financial Conduct Authority (690175)

United KingdomAustralia

Customer Feedback