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Cash point.

Byline: WITH TRICIA PHILLIPS

Just one in five people can calculate how long it takes to clear a PS1,000 credit card balance, with a typical 18.9% APR while repaying the minimum PS25 each month.

Two-fifths had no idea and the rest simply got it wrong, according to the Debt Advisory Centre.

The answer is that it would take five years and one month, and would cost a hefty PS509 in interest. That's worrying when 10% of credit card users only make minimum monthly repayments.

Pay just PS5 extra each month and you'd clear the balance in three years and 10 months and pay PS378 interest.

Pay PS45 and you'd chop it to two years, four months with PS217 interest.

Switch to a 0% balance transfer card, paying PS45 monthly, and you'd be debt-free in one year and 11 months and pay a typical PS27.50 fee.

Andrew Hagger from Moneycomms.co.uk says: "Paying the minimum on credit card balances will cost you dear. Those on cards charging 18.9% or more should try switching to a 0% balance transfer card or a low rate card such as Everyday Plus from MBNA at 7.4%."

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Title Annotation:Business; Opinion, Columns
Publication:The Mirror (London, England)
Date:Feb 25, 2016
Words:197
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