Next month the UK’s biggest credit card provider, Barclaycard, is slashing the minimum monthly amount that its millions of customers must pay off towards their debt. It may sound like good news, but it’s not. The dark flipside of this change is that Barclaycard debts where customers pay the minimum will take more than twice as long to pay off, and before the debt’s gone customers will have paid more than twice as much interest. So it’s lose-lose.

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At the moment, people who have a debt on their Barclaycard must normally repay 3.75% of it each month subject to a minimum payment of £5. But from 22 July that amount is being cut to just 1%. That is the lowest amount allowed by the regulator, and calculations from Moneyfacts data in February show it’s well below the average of just over 1.6% charged across the market. The £5 minimum payment is also barely half the £9.50 average. Those who just pay the minimum will see that payment reduced significantly – but may not realise the long-term harm it can do.

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Figures calculated by moneysavingexpert.com show that for a Barclaycard with a typical 24.9% interest rate, £1,000 of debt will now last 19 years and three months compared with nine years eight months on its old rate. Over that period you will now pay £1,655 in interest compared with just £699 under its previous policy.

Anyone with a debt on a Barclaycard or any other card should draw up a plan to pay it off. Step one is to cut the card up and stop using it. Step two is to check the cash amount paid last month. Step three is to pay that same fixed amount – more, if you can afford it – each month, either by standing order or direct debit.

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Barclaycard allows these fixed regular payments, though not all card providers do. If yours doesn’t then you should make a manual payment each month on top of the minimum payment. Paying that fixed amount until the debt vanishes will slash both the time it lasts and the total interest you pay. For help with worrying debts of any sort, contact nationaldebtline.org, stepchange.org or your local Citizens Advice.

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