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<\/p>Example: Tom has a \u00a34,000 credit card debt<\/h4>
Admin assistant Tom has run up a \u00a34,000 credit card debt but can only afford the monthly minimum payments of \u00a365.<\/p>
If Tom continues to pay off his debt at 18.9% APR with the \u00a365 monthly payments, it could take him 13 years<\/strong> to pay it off. Aside from paying back his debt amount of \u00a34,000, he would end up spending a further \u00a36,121<\/strong> on interest.<\/p> A friend suggested he consider a balance transfer card<\/a>, giving him a promotional 0% interest rate for 24 months, with a one-off fee of 1.4%. Under this offer, Tom could continue to make the monthly minimum payments of \u00a365, but the interest break means he could pay a lot less overall and pay off his debt faster. The balance transfer offer means he could pay off his debt in 6 years and 7 months<\/strong> and only end up spending a further \u00a31,169<\/strong> on fees and interest. By transferring his debt to a 0% balance transfer offer, Tom would save \u00a34,952.<\/p> * This is a fictional, but realistic, example.<\/strong><\/small><\/p>\n\n\n<\/div><\/article> Different types of credit cards explained<\/strong><\/a><\/p> If you miss a payment, you could incur penalty fees and could also have the 0% offer withdrawn or the time reduced.<\/p> If you forget to pay or can\u2019t afford to pay your minimum payment, you will incur fees and this could impact your credit report.<\/a> This, in turn, could affect your ability to attain credit in the future.<\/p> If you accidentally missed the payment date, make a payment immediately. However, if you\u2019re struggling to pay, contact your provider as soon as possible as it may be able to help.<\/p> You could also risk having your interest rate increased or perhaps the introductory 0% period on your card shortened or withdrawn altogether.<\/p> All you need to know about debt<\/strong><\/a><\/p>How does minimum payment work with 0% offers?<\/h3>
Duration<\/th> % of total to repay each month to clear debt<\/th> What that would equal per month on a \u00a32,000 debt<\/th><\/tr><\/thead> 6 months<\/th> 16.67%<\/td> \u00a3333.33<\/td><\/tr> 9 months<\/th> 11.11%<\/td> \u00a3222.22<\/td><\/tr> 12 months<\/th> 8.33%<\/td> \u00a3166.66<\/td><\/tr> 14 months<\/th> 7.14%<\/td> \u00a3142.85<\/td><\/tr> 16 months<\/th> 6.25%<\/td> \u00a3125.00<\/td><\/tr> 18 months<\/th> 5.56%<\/td> \u00a3111.11<\/td><\/tr> 20 months<\/th> 5.00%<\/td> \u00a3100.00<\/td><\/tr> 24 months<\/th> 4.17%<\/td> \u00a383.33<\/td><\/tr><\/tbody><\/table> What happens if I miss a minimum payment?<\/h3>
Frequently asked questions<\/h3>
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