Savings and loans co-operative in Shropshire warns of credit card traps
A member-owned savings and loans co-operative has warned Shropshire residents not to fall into the credit card debt trap.
Just Credit Union warns that it could take more than 25 years to repay £3,000 on a credit card by making minimum payments - which will mean paying back thousands of pounds in interest payments.
As Christmas credit card statements hit doormats, Steve Barras, development officer at Just Credit Union, said: “A credit card minimum repayment is the lowest amount you must pay each month and is usually a percentage of your outstanding balance.
“This is typically around 1-2.5 per cent of how much you owe or £5-£25, whichever is the higher.
“Failure to pay on time usually results in a fee and a missed payment can damage your credit score as well as your ability to get future credit."
He said that borrowing £3,000, repaying the minimum amount and with no further spending on the card, it would take 27 years with an interest cost of £4,000.
Just Credit Union has members across Shropshire and Telford & Wrekin
Mr Barras added that Just Credit Union wants members to pay off their debts as quickly and as cheaply as possible and start to build some savings.
For more information visit www.justcreditunion.org
Figures are based on a £3,000 at 17.9 per cent with minimum payments of 1 per cent of the balance plus interest.
