Martin Lewis, founder of Money Saving Expert (MSE), has issued an “important warning” about credit cards, revealing that a little-known rule could see a single penny cost as much as £1,000 in interest.
In a video on the MSE website, Lewis explained that if you spend £1,000 on a credit card and pay off £999.99, leaving just 1p unpaid, you will be charged interest on the full £1,000 – not just the remaining penny. “This is why for years, my catchphrase has been pay off your credit card in full – the ‘in full’ is important,” he said.
Lewis emphasised that paying off the entire balance each month “neuters the credit card's ability to charge you interest.” He added: “If you miss even a penny, it can still charge you a whack.”
MSE also warned about the dangers of missing the minimum monthly payment, which can result in a late fee and a mark on your credit file for up to six years. Making only the minimum repayment can keep you in debt for years or even decades.
For more advice on credit cards, visit the MSE website.
