Here’s how, by changing payment behaviour, one member was able to pay off her debt quickly and more cheaply…
Zoe's credit card balance is £3,000 and her interest rate is 17.9%. Her minimum payment this month is £71.45, with only £30 of it actually reducing her balance, and the remaining £41.45 covering the interest. This means she's paying more in interest and charges than repaying her balance.
If Zoe were to increase her monthly payment to £100, she’d pay £58.55 off her balance and £41.45 in interest. If she continued paying the £100 each month, she’d pay £2,325 less in interest, and clear her debt 10 years and 8 months quicker than if she only made the minimum repayment each month.