Money management tool reveals the true cost of Christmas-fuelled credit card spending.
Pariti, the financial health app which gives users a better view of their personal finances, has estimated that spending over the Christmas period cost people an average of £86.12. After analysing data from close to 6,000 credit card holders and £10m of transactions, the London-based startup found that the average card holder spends £919.88 per month on cards in November and December. This represents an additional £191.16 of spending against the previous months of the year.
The users in Pariti’s sample were between 18 and 56 years old, and had an average of 1.2 credit cards per person.
According to Pariti, the extra £191.16 will take 73 months to be fully repaid, and will end up costing £86.12 in fees. These results are based on further Pariti research which suggests that the average monthly repayment on credit cards is just 5 per cent of the total balance.
“Credit cards may seem like a good short-term solution to get people through the difficult Christmas period, but purchases which don’t seem big at the time can very quickly turn expensive with each passing month”, said Matthew Ford, founder and CEO of Pariti.
Pariti is designed to help users limit their spending in order to save more. The app also seeks to help users to become debt free. One channel for achieving this is its partnership with leading marketplace/peer-to-peer lender Zopa. The two fintech companies joined forces in September to offer Pariti users Zopa-powered refinancing options, via a direct integration. CEO Matthew Ford said at the time that it was the first of a number of planned product integrations, and the start of its journey towards becoming a “marketplace bank”.