Home loan holders 'should avoid making repayments by credit card'

By Mozo ·

Aussies should avoid paying off their mortgage debt with a credit card, an expert website has advised.

An editorial on Money-au said that while people who choose this option may not pay more interest in the short term, interest costs will quickly "balloon" in the long term.

The news provider noted that while most mortgages cost between three to six per cent in annual interest, credit cards charge anywhere between 15 per cent and 30 per cent, suggesting that Aussies should compare credit cards when selecting them for any purpose.

In addition, it noted that instead of using a credit card to pay off a home loan, bank customers are better off allowing the interest accrued on a mortgage to build up by asking for a "payment holiday".

Last month, the consumer advocate group Choice found that credit card customers are paying more than they expect in interest charges because of a range of hidden fees.

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