The hidden costs of your food bill

How many times do you walk into the supermarket to buy a bottle of milk and end up with bulging bags full of groceries you don't really need?

We all get tempted by the 'Buy One Get One Free' offers and 3 for 2 deals, food near its sell by date or things that seem like bargains but which we end up never using!

Although we might have the cash in our pocket for the intended bottle of milk, it's so easy to suddenly realise at the checkout that that bottle of milk has turned into a basket full of other items - and as a result, we've overspent and have to resort to using a credit card. And it's just as easy to pull out the plastic and worry about it later.

However, if you’re regularly using credit cards to pay for your food bills, and not paying off the balance in full each month, you may find yourself dependent on credit to live.

Once you’re in the downward spiral of debt, it can be difficult to recover.

The true cost

If you are only making the minimum monthly payments on your credit card each month, it could take years to clear something that started off as a relatively small debt. 

Last month credit card interest rates hit an all time high with an average APR of 16.69%.

If you took a card out with this interest rate, spent £1,500 (or six months’ worth of food shopping per household according to CCCS figures) and only made the minimum payment of 2% of the balance, it could take you nearly 28 years to clear the debt.

You would also be paying nearly double the original amount in interest (the equivalent of each 500ml bottle of milk costing nearly a pound).

Small debts can also be increased by hidden interest and charges if you forget to pay on time or miss the odd payment.

So although you think you’re benefitting from the initial savings on the ‘BOGOFs’, paying for them with a credit card, particularly one that you are just making the minimum payments on, could mean they are a very expensive bargain.

And don’t forget that the cost of food is going up as well, with the overall price of food rising by 1% between June to July. The Office for National Statistics stated that this was the biggest single monthly rise they’d ever recorded.

Spending more on our weekly shop and rising credit card costs means that we have to manage our budgets more carefully than ever before.

Taking control

If you are using credit to get by each month it could signal that you are living beyond your means or you don’t have enough money to live on. Either way, it’s important that you draw up a budget to identify the problem and start to take control of your finances.  

If you would like help to do this, you can contact CCCS. Our online debt advice facility Debt Remedy can assist you in completing a financial statement and you will be provided with tailored advice on the best way to deal with your situation.

Alternatively, if you would prefer to speak to a debt counsellor about your circumstances, you can call our free helpline on 0800 138 1111. Lines are open Monday to Friday 08:00-20:00.