That’s according to new figures released by credit experts in a bid to highlight the consequences of neglecting debts.
It’s not only the length of time which can cause a burden to borrowers who only pay the minimum each month, there are also financial costs.
Indeed, the research by TotallyMoney and MoneyComms found a person with a £2,604 balance who made only the minimum repayment at a fixed interest rate of 19.9% APR would end up paying £3,775 in interest.
Slashing repayment time
And the firms are particularly concerned having found 80% of people were unaware of the ‘dangerous trap’ they may fall into by paying back such a small amount each month.
Now they are advising that by simply paying back a slightly bigger, fixed amount each month, credit card customers can slash the time taken to repay the balance and the interest.
Based on the credit card debt example used above, with a balance of £2,604, the experts suggest fixing the repayment to £66 each month, would enable the borrower to reduce the repayment time to five years and cut the interest by £2,367.
Alastair Douglas, CEO of credit experts TotallyMoney, said: “While it’s alarming how much money people can save by making one small change to their repayment habits, especially as figures suggest there’s over £580 million lost in interest charged each month, it’s even more concerning how many people don’t know how making only the minimum repayment impacts them.