According to a university study, credit card holders are risking, running into debt because they focus too much on their minimum repayments. Doctor Neil Stewart, who recently published the paper in the journal Psychological Science, stated that, the application of a minimum repayment means that customers are continually paying only the lowest repayment value. In psychological terms this is considered “anchoring” where a person allows a single factor to cloud and control their judgement or perception of a situation.

Dr. Stewart said that this is occurring with 35 per cent of credit card users, who are making the minimum repayments on their credit card bills. He added that customers feel that they are “getting away” with paying the smallest repayment amount, because of their anchoring mentality.

He continued to say: "Virtually all credit card statements include minimum payments. But this consumer safeguard has an unexpected negative consequence: Minimum payments distort the behaviour of many customers in a way that increases interest charges and increases the duration of their debt.

"Those paying off the balance in full each month seem to be immune, but anyone repaying only part of the debt is at risk - not just those making only the minimum payment…These results should be of real concern to credit card companies."