Top 20 false economies
Paying just the minimum amount on your credit card bill each month has topped a list of false economies, according to a survey by Gocompare.com.
Wasting money on cheap fakes, bending the truth on insurance applications to reduce premiums and not bothering with travel insurance followed close behind.
The survey also revealed the nation's most common 'bad buys' as buying cheap shoes, cheap paint and cheap loo roll.
However, Claire Peate, customer insight manager at Gocompare.com, warned: "While most people will be able to quickly recover the money lost on buying fake goods, a cheap pair of shoes or bra, other false economies can have more far reaching financial consequences.
"Making the minimum repayment on a credit card bill justifiably tops the list of false economies and can be a very expensive mistake. Credit card issuers add interest to any outstanding balance so the longer you take to repay the debt, the more money you will owe them. For example, it could take up to 37 years to repay a debt of £5,000 if you only make the minimum repayment each month."
She added that although it may be tempting to provide incorrect information to insurance companies, "this false economy can leave you seriously out of pocket, invalidate your insurance and make it harder for you to get cover in the future".
Biggest false economies
1. Just paying the minimum amount off your credit card each month
2. Buying counterfeit goods
3. Lying on your insurance application to get a cheaper premium
4. Going abroad without travel insurance
5. Not having your car serviced
6. Buying cheap shoes
7. Buying cheap paint
8. Buying cheap loo roll
9. Saving money by not having your boiler serviced
10. Comparing only price, not quality
11. Not having breakdown cover for your car
12. Gym memberships
13. Buying a cheap car
14. Buying a cheap bra
15. Mobile phone contracts
16. Buying cheap moisturiser
17. Shopping at £1 shops
18. Doing-it-yourself rather than employing a tradesman
19. Trying to avoid baggage charges on budget flights
20. Multi-buy or 3 for 2 offers
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.