Use this guide to work out how long it will take to pay off your credit card balance

If you had a £1,000 balance on a typical credit card with an 18.9% APR, and paid a minimum monthly payment of 2.5% or £15, how long would it take you to pay off?

(a) 5 years, (b) 9 years, (c) 19 years, (d) 29 years, (e) I don’t know

Debt Advisory Centre posed this question to 1,300 people and found that around 80% didn’t know the correct answer.

Almost a quarter believed it would take between 19 and 29 years to repay the balance in full. A fifth were more hopeful that it would take just 5 years to clear the balance. ‘I don’t know’ received the largest number of responses with 38%.

Just a fifth of people chose the correct answer – it would take around nine years to repay a £1,000 balance by making minimum monthly repayments.

With a quarter of people who use a credit card not clearing their balance in full every month, it is concerning that so many consumers don’t understand how to calculate how much they are paying back or simply haven’t used one of the online tools to check this.

Interestingly, consumers in Yorkshire are more likely than those in any other UK region to clear their balance each month, with almost half saying they do so. In fact, just 6% of those questioned in Yorkshire make minimum repayments and 13% pay the minimum plus an additional payment depending on how much they can afford.

The higher number of people clearing their balance in Yorkshire could explain why half of those questioned in the county said they feel anxious having a balance and are motivated to clear their debt.

Better management of your credit card is one of the best habits to grasp in 2016. If you are carrying a balance after your Christmas spending, here are simple steps you can take to clear the debt faster:

Use an online tool to see how long it will take you to repay your existing credit card balance.

Then increase your payment so you clear as much as you can afford every month to minimise the amount of interest added to your debt. Remember, just paying the minimum amount could leave you paying-off the balance for years.

Avoid making late payments so you don’t have penalty fees added. If you can’t make a payment, call your credit card provider to let them know in advance. And if you regularly struggle, consider taking debt advice.

If your credit history is good, try to switch your balance to a 0% interest rate credit card. Transferring a debt from a card with a high rate of interest to a 0% interest rate should help you to clear the debt faster. If you do transfer a balance, make sure you cut-up the old credit card and close the account so you don’t spend on both cards.

Debt Advisory Centre: 0161 871 4881