youthmoney

Barclaycard this week announced changes to its minimum repayments. Most customers see their monthly minimum reduced — from 2.5% to 2.25%. Marks & Spencer is doing similar with its store card.

Which is a great time to warn young people of what happens if you have a large debt and pay off only the minimum. Like, as Martin Lewis points out in today’s Sunday Times Money, it could take you forty years to pay off.

“Suppose Arthur Sixpence owed £3,000 on a high-street credit card with a typical rate of 17.9%. If he only made the minimum 2% repayments, his hair would bypass the grey stage and go straight to white because it would take him 40 years to repay, at an interest cost of £6,300.”  

For more Martin Lewis wisdom, see his money saving expert website.