When asked ‘how long would it take to clear £2,000 in credit card debt if you just pay the minimum each month’ (18 per cent APR, minimum payment 2 per cent of the balance or £5, whichever is greater), 36 per cent of respondents estimated the debt would be paid off in 5 years or less, 64 per cent 15 years or less and 78 per cent 25 years or less.

In reality, it would take over 34 years to clear the debt. Only one per cent of respondents answered correctly.

Respondents also underestimated the amount of interest they’d pay. 36 per cent thought they’d pay less than £499 in interest, while 64 per cent thought less than £1,999.

In reality, you’d be charged £3,983 in interest. Only 4 per cent of respondents estimated this figure correctly.

“An astonishing amount of people don’t understand credit card debt. These findings are particularly concerning given how respondents said they typically manage their credit card debt,” said Alastair Douglas, CEO of TotallyMoney.com.

“Most worryingly, the minimum payment option is most popular among younger people: 29 per cent of 18-24 year olds and 21 per cent of 25-34 year olds said that they just make the minimum payment each month.

“Moreover, it appears that there’s significant confusion around what making the minimum payment actually means. When those respondents who said they make the minimum payment each month were asked why they chose that option, 33 per cent said they did so to avoid paying interest, and 18 per cent said they thought it was the cheapest way to clear their debts.”

In response to these findings, TotallyMoney created an interactive calculator to help people understand how credit card payments work, and avoid the minimum payment trap. Click here to view.

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