Do you know how long it would take to pay off your credit card debt just using minimum monthly repayments?

Money website SavvyWoman.co.uk asked 2,000 people how long it would take to clear a £1,000 credit card balance when only making the minimum repayment, typically 2.5% of the money owed. The interest rate was set at 18% APR.

The correct answer is a lengthy 17 years, amassing a huge £1,200 in interest – more than double the original spend. However, more than half (55%) thought it would be less than 10 years. Astonishingly only six people knew the right answer.

Why minimum repayments matter

You might think that as long as you’re paying something back each month you’re doing exactly just what you need to clear your debt. But as the survey shows, the longer you are paying off your card, the more cash you’ll be charged in interest.

Minimum repayments are a percentage of the total debt, so the amount you actually pay each month reduces as you clear the total debt. So you’d start paying say £25 and that would gradually reduce each month.

A better option is to pay back as much as you can afford as a fixed amount. For example, if you were paying £25 a month you’d clear it in just under five years and pay £470 in interest.

Another way to clear the debt

It is possible to transfer the balance of your credit card to another credit card and pay zero interest. This will give you a limited amount of time to clear the debt without racking up more and more borrowing in the form of interest.

Balance transfer credit cards also come with a fee, normally a percentage of the total you move across. Generally, the longer you want the 0% period to be, the higher the fee, so work out if it doesn’t ultimately cost you more to transfer than the original interest charges.

Reducing the rate of interest

If you can’t get a 0% balance transfer card, or they don’t last long enough for you to have the opportunity to pay off the debt, you might want to consider a low-APR card. These usually charge a lot less in interest than standard credit cards so it’ll cost you less and you’ll clear the debt quicker than sticking with your existing credit card.

You might have thought that you had successfully ended your relationship with someone who was dreadful with money – and that the day you ended the relationship would be the last one where you had to deal with their overspending, irresponsibility or inability to understand that borrowing is not the answer to everything. However, for two out of three people who have split up in the past year, things are not as easy as that.

A study by the Debt Advisory Centre (a commercial company selling debt arrangement schemes) found that of the three million people who split up with a partner in the past year, 36% still seem to have a joint mortgage with their ex, and 30% still have a joint tenancy agreement. One in five had a credit card or loan in both names, one in five had a joint bank account, and 12% had joint assets also.

In some cases, their financial complications mean they quite literally it is impossible to move on. Some 4% are forced to continue living in the same houses as their ex while they try to extricate themselves from each other’s financial constraints.

Complications

Joint mortgages and tenancies are a the biggest nightmare, especially where one or other of you is unreliable about making payments, or the split has been particularly unpleasant. You are both liable for the whole of the rent or mortgage payments, regardless of which one of you stays in the property. If you have moved out, you may find that you may need to spend all your cash on a new place, but if your other half can’t afford to pay the mortgage or rent, you’re both in financial trouble.

This is more common than you might expect. A study last year by uSwitch found that over 2 million people had been saddled with debt run up by an ex. This included an average £457 on a credit card, £313 in joint accounts, £463 in mortgage debt and £327 in online shopping accounts.

Get some help

Debt expert, Melanie Taylor of the Debt Advisory Centre said: “Relationship breakdown is a major cause of problem debt. Unpicking a relationship is fraught with difficulties and communication is often strained or non-existent. But couples do need to agree on who is going to contribute towards clearing debts and bills that were taken in joint names – whether that’s an overdraft or the mortgage or rent.”

“If you find yourself saddled with debts that your ex isn’t willing to contribute towards, it is important to speak to your lenders, or seek debt advice as soon as possible.”

The best place to start is a debt charity like StepChange or Citizens Advice, who will help and guide you through the process of splitting your finances, as well as running through your best options when it comes to tackling your debts.

Credit score

Even if you manage to split amicably, and without any major financial trauma, your overspending ex can still cause trouble for you for quite sometime. If you have had any joint accounts or other financial products, your credit histories will be linked.

It’s a good idea to close any accounts you can, to protect yourself from their spending, and from their bad financial habits harming your credit history.

Once you have extricated yourself, you also need to get in touch with ratings agencies like Experian and Equifax, and check that they have noted on your file that you no longer have a financial connection to your ex, helping to eliminate and further ongoing financial stress.

It’s not an easy process, and splitting up is never cheap, but the sooner you can start the process and can get on top of the money issues in a split, the quicker you can move on.