Follow this one simple step to better borrowing so you don’t waste your lockdown advantage.

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According to The Money Charity, the average person has credit card debt of £2,595. At an average 24.7% APR (Moneyfacts, Sep 19), the minimum payment is around £75 in the first month. Assuming you don’t borrow any more, the minimum payment then reduces each month as the balance comes down, which may seem affordable or a way to keep cash free, but it will take you longer and cost you more to clear your balance. Plus you are more exposed should something unexpected happen.

Create new borrowing habits

If you only make the minimum payment each month, it's will cost £4,604 in interest and take 27 years and 3 months to pay off.

BUT, if you were to pay just an extra £20 a month off this same credit card, you would save £2,860 in interest and pay it off 20 years and 4 months sooner.

Better still, fix your payments at £75, the same as that first month’s minimum, and you would pay off the debt in just 4 years and 8 months AND save £3006 in interest. It takes less time to raise a child to adulthood than the time you’ve saved on paying off your debt.

Get more out of life with ilumoni

​ilumoni is a free app due soon register your interest today and we’ll let you know when the app is ready. Be among the first to Borrow Well.

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Whether that’s reducing your payments, simplifying your borrowing, clearing debt faster or living debt free, we’ll help you to take control of your borrowing and pay as little interest as possible. You’ll never borrow the same way again.