CREDIT-CARD firms are making debt last 30 years longer than necessary by manipulating minimum repayments. And a devious change this week to Barclaycard means customers could have another five years added.

So don’t be fooled by the innocence of the phrase “minimum repayment”; it’s a danger signal.

Confusingly with credit cards, unlike loans or mortgages, the interest cost is separated from the amount that needs repaying. You have total freedom to pay off as much or as little as you like, providing it meets the prescribed minimum.

Why minimum repayments are dangerous

Let me first express some admiration for the sheer genius of the minimum-repayment concept.

Designed to look innocuous, possibly even consumer-friendly, it is a powerful anticonsumer weapon that makes debt linger, and linger, while the credit-card firms rake in huge profits.

It’s all because the minimum is set as a proportion of your outstanding debt, usually 2% or 3%, with a £5 minimum. So while it may seem generous to let us repay a tiny amount a month, it means repayments only just cover the interest, so the debt is hardly touched. And as the amount owed slowly decreases, so does the amount you repay, leaving you permanently indebted and paying interest.

If you think I’m overegging it, this example may just shock you. Suppose Arthur Sixpence owed £3,000 on a high-street credit card with a typical rate of 17.9%. If he only made the minimum 2% repayments, his hair would bypass the grey stage and go straight to white because it would take him 40 years to repay, at an interest cost of £6,300.

It’s no wonder the lenders are so keen to give us the option to automatically repay only the minimum by direct debit.

Warning: Barclaycard and Marks & Spencer are reducing their minimums

The innocuous-looking note in the statements posted to Barclaycard and M&S &More card-holders are actually nightmares. Most Barclaycard customers’ minimums are dropping from 2.5% to 2.25%. This looks insignificant, but the real impact is huge.

I estimate someone owing £5,000 at Barclaycard’s standard rate, repaying the minimum, will take five years longer to clear the debt and pay nearly £1,000 more interest. The M&S change from 3% to 2.5% has a similar impact. In their defence, these cards are no worse than others.

How to fight back

The easy solution is to increase repayments, yet many of those paying only the minimum do so because they can’t afford to pay much more. In that case, just fix the repayment at its initial level.

Let’s return to Arthur Sixpence’s £3,000 debt at 17.9%. As the minimum repayment is 2%, his initial instalment is £60. He should fix his repayments at that level – a figure we know he can afford – instead of allowing it to fall. If he did fix – and this is staggering – he’d pay the debt off in just seven years at a cost of £2,100 interest, rather than in 40 years at a cost of £6,300, a saving of 33 years and more than £4,000. Of course, if he could afford to pay more it would be paid off even quicker.

I’m assuming here that there’s no more borrowing being done – anyone only able to afford the minimum repayments should urgently look at cutting back on spending and avoid all new borrowing.

Making a balance transfer to a cheaper card to cut the interest would help too. Today’s market leader is NatWest, offering new customers 0% for 13 months with a 2% fee. (More options are at moneysavingexpert.com/bts).

The direct debit dilemma

Standard advice is to repay cards by direct debit, ensuring you never accrue a late-payment charge, but unsurprisingly the minimum-repayment option looms large on lenders’ direct-debit forms. You should, however, be able to ask to pay a fixed monthly sum rather than the minimum expressed as a percentage. You’ll need to write this on the form because it isn’t normally given as an option. The credit-card firm should honour this request, but do call to confirm it has been acted on.

If you can’t guarantee repaying more than the minimum each month, you can always make a second payment on top.

When minimum repayments are good

While for me minimum repayments are dreadful, there are exceptions: If you’re a stoozer. As I’ve written here before, it’s possible to manipulate the credit-card system to make free cash by borrowing money at 0% and saving it at a high interest rate. It’s called stoozing. If you are following this plan, you want to repay your debt as slowly as possible because you’re profiting from it; If you’ve other more expensive debts. Always throw spare cash at the debt with the highest interest rate, and pay only the minimum on everything else.

Martin Lewis is a broadcaster and the creator of Moneysavingexpert.com, a free website dedicated to showing people how to save money