"The interest is only a bit a month"

The interest line on the statement is small. Fifty-something pounds. Sixty. It's the price of the convenience and it's less than a night out.

StepChange gives a plain example. Owe a thousand pounds at twenty per cent and you could owe two hundred pounds in interest after a year, depending on the terms. Now do it for your balance. Four thousand at twenty per cent is eight hundred pounds a year. Sixty-something a month, which is the number you see, and which sounds like a night out, becomes eight hundred a year, which sounds like a holiday, and it's the same money looked at over a different stretch. The monthly framing is what makes the interest small, and the statement uses the monthly framing for the same reason it puts the minimum where your eye goes.

Jack Soll and colleagues, in 2012, studied how people understand what they owe. In one study, people underestimated how long it would take to clear a debt when the payments barely covered the interest. In another, less numerate people underestimated the monthly payment needed to clear a debt in three years, and the improved statement that American law required reduced the errors but didn't remove them, and many people still underestimated what they'd need to pay if they went on using the card while paying it down. These were American statements, and ours differ. The direction is the point. People can't see, from the numbers in front of them, how long the balance will last or what it costs, and the errors run toward thinking it's shorter and cheaper than it is.

Take the coat. Two hundred and twenty pounds, on a card at twenty per cent, paid down at the pace the minimum sets. The coat's real price isn't two hundred and twenty. It's two hundred and twenty plus every month's interest on the portion of the balance the coat is, for as long as the coat stays on the balance, and at minimum-payment pace that's years, and the coat has cost you a good deal more than the ticket said, and you'll have bought the next coat before this one's paid for.

"Only a bit a month" is true of the bit and false of the year. Add the interest line up for the last twelve statements, and then ask what you'd have bought with that, and then notice that you didn't get to, because the card had it.