What is the minimum payment on your credit card?

Why is making the minimum payment important?

Making the minimum payment on time each month protects your credit score and keeps your account open. Missing it — or paying less than the minimum — can lead to:

• Late payment fees added to your balance
• Extra interest charges
• A mark on your credit file that can make borrowing harder in the future
• The loss of any promotional rate, such as a 0% deal, if one is in place

Setting up a Direct Debit for at least the minimum payment is the simplest way to make sure you never miss it, even in a busy month. Just make sure you have enough in your bank account to cover it, as a failed payment could still result in a missed payment fee and a mark on your credit file.

How is the minimum payment calculated?

The minimum payment depends on your lender, but it is typically calculated as a percentage of your outstanding balance — usually between 1% and 2.5% — or a fixed minimum amount, whichever is higher. The fixed minimum is often between £5 and £25.

This means your minimum payment changes from month to month as your balance goes up or down. Your lender might use one of these methods:

• A flat fee, for example £10, regardless of your balance
• A percentage of your balance, for example 3.5%
• A percentage of your balance plus any interest you owe

For example: if your balance is £1,000 and your lender calculates the minimum payment at 2%, that is 2% of £1,000 — so you would need to pay at least £20 that month, or the fixed minimum if that is higher.

Use our credit card interest calculator to see how your own balance and minimum payment could play out over time.

Should you only make the minimum payment?

Making the minimum payment keeps your account active, but it is not a long-term strategy. Here is why.

When you only pay the minimum, most of your payment goes towards the interest that has built up — not the balance itself. This means your debt reduces very slowly (if at all), and the interest keeps adding up on top.

To put that in perspective: if you owed £1,000 on a credit card with a 20% interest rate and only ever made the minimum payment, it could take over 30 years to clear the balance — and you would pay far more in interest than you originally borrowed.

If you can afford to pay more than the minimum each month, even a small increase makes a real difference to how quickly you clear your balance and how much interest you pay overall.

Is it ever okay to only make the minimum payment?

Yes — if money is tight one month, making the minimum payment can be the right thing to do. It protects your credit score, avoids late fees, and keeps your account running smoothly.

The key is not to let it become a habit. If you find yourself regularly only able to make the minimum payment, it is worth reviewing your budget to see whether you can free up anything extra; even a few pounds more each month can significantly reduce the total cost of your debt over time.

If you are struggling to keep up with payments at all, speak to your lender. Most providers have support teams who can help you find a manageable way forward.

What happens if you keep making only the minimum payment?

The longer you rely on minimum payments, the more expensive your debt becomes. Over time:

• Your balance reduces very slowly, because most of each payment covers interest rather than the debt itself
• The total amount you pay back can end up significantly higher than what you originally borrowed
• You may find it harder to reduce your credit utilisation ratio, which can affect your credit score

The most effective way to get on top of credit card debt is to pay as much as you can each month — ideally the full balance, or as close to it as your budget allows.

Could a balance transfer help?

If you are carrying a balance and finding it hard to make progress, a 0% balance transfer card may be worth considering. This involves moving your existing balance to a new card that charges no interest for a set promotional period — meaning your payments go towards clearing the debt rather than covering interest charges.

Balance transfer cards are not available to everyone, and eligibility depends on your credit score and individual circumstances. There is usually a transfer fee involved too. But if you are eligible, it can be a genuinely effective way to reduce the cost of your debt and clear it faster.

How can you manage credit card payments better?

A few simple habits can make a real difference:

• Pay as much as you can each month. Clearing the full balance is always the best option, but any amount above the minimum helps.
• Set up a Direct Debit. Choose the full balance if you can, or a fixed amount above the minimum — this way payments go out automatically, and you reduce the risk of missing one.
• Keep your balance low. Try to stay within 25 to 30% of your credit limit where possible. This keeps your credit utilisation low and makes the balance easier to clear each month.
• Only spend what you can afford to repay. Using your credit card for purchases you know you can pay back keeps debt manageable.

Where to get free debt advice

If you are struggling with credit card debt, free and impartial support is available from:

• StepChange — a charity offering free debt advice and practical solutions
• Citizens Advice — free, confidential guidance on debt and money
• MoneyHelper — a government-backed money guidance service
• National Debtline — free telephone and online debt advice