The rate of spending on credit cards has been said to have increased by £179 million, in each quarter during 2007, while the average minimum repayment price has decreased; meaning a larger debt value for card users.

The Minimum Repayment Index, a report that was conducted by a financial website, showed that the average repayment on credit card charges, has fallen from 2.65 per cent to 2.54 per cent; a 0.11 per cent drop. Also it was said that only 11 per cent of card users actually pay back the minimum requirement, this minimal figure on repayment means that around, £437 million is added in interest rate charges.

In the last year, two credit card providers; Citibank and Clydesdalebank – which both had a minimum repayment rate of 3 per cent - lowered their rates to 2.25 per cent and 2.5 per cent, respectively. Though the changes may appear insignificant, a 0.25 per cent drop in the repayment rate can see the interest paid on cards, increase by £800 along with a rise in the term time by seven years.

Simeon Linstead, Head of Personal Finance, said: “Over the past year we have seen an increase in credit card spending, making minimum repayment levels more of a problem now than ever before. With the cost of living on the up and people being forced to tighten their purse strings, consumers will be more tempted to just make the minimum repayment on their credit cards and spend the cash on more pressing bills.

“Sending a small monthly payment to the credit card company may seem like a good idea at the time, however this is an expensive lesson in term. We urge the credit card industry to set all minimum repayments at 3 per cent, we have long been calling for this, and it is long overdue.”