Consumer's 26-year bill headache

Minimum repayment charges have been falling

It could take consumers 26 years to pay off their credit card debt if they only make the minimum monthly repayment, research has revealed.

The research - conducted by financial website moneysupermarket.com - worked on the premise that the consumer would pay back a debt of £2,200 by just making a monthly minimum repayment of 2%.

The consumer would pay £2,463 in interest over the 26 years at an annual percentage rate of 13.9%.

If the minimum repayment was set at 5% then the consumer would repay the debt in four years paying £600 in interest, the website calculated.

In recent years many credit card firms have reduced the minimum repayment from 5% to 2% of the total amount borrowed.

"Paying just the minimum monthly payment each month may help keep consumers initial monthly outgoings low, but in reality it will cost them a great deal more over the long term," Stuart Glendinning, director of credit cards at moneysupermarket, said.

Last week, the government proposed that credit card statements should include a warning that only paying back the minimum monthly repayment will cost consumers more in interest charges.

Minimum repayment costs
Minimum monthly repayment	Time taken to pay back £2,200	Interest paid over period
2%	26 years	£2,463
3%	14 years 8 months	£1,207
5%	8 years 4 months	£600
10%	4 years 4 months	£267
Source: Moneysupermarket.com