Paying only the minimum each month on a credit card keeps your account out of trouble, but it can leave you paying interest for years. On a £2,000 balance at 24% APR, sticking to the minimum can mean more than 15 years of repayments and a total cost well above the original sum borrowed.
This article is general information about how credit card minimum payments work. It is not personal financial advice. Your own situation will depend on your balance, your card's interest rate, and your wider finances.
What does paying only the minimum actually mean?
The minimum payment is the smallest amount a credit card provider requires you to pay each month. Pay at least this, and your account stays in good standing. Pay less, and you risk a missed payment charge and a mark on your credit file.
Most UK providers set the minimum at roughly 1, 2% of the outstanding balance, or a fixed floor (often around £25), whichever is greater. Some use a formula of 1% of the balance plus that month's interest. The exact calculation varies by provider and is set out in your credit agreement.
The critical point: when the minimum is set as a percentage of a falling balance, the pound amount you pay shrinks each month. Most of each payment goes on interest. Very little chips away at the underlying debt.
How does the maths work in practice?
Consider a round example: a £2,000 balance on a card charging 24% APR. According to the FCA's credit card market data and the Bank of England's monthly interest rate series, the average interest rate on credit card lending in the UK has consistently sat in the range of 20, 25% APR in recent years, making 24% a representative figure for illustration, though rates on individual cards vary widely.
The minimum payment is calculated as 1% of the outstanding balance plus that month's interest. Monthly interest rate: 24% ÷ 12 = 2% per month.
| Month | Opening balance | Interest (2%) | 1% of balance | Min. payment | Closing balance |
|---|---|---|---|---|---|
| 1 | £2,000.00 | £40.00 | £20.00 | £60.00 | £1,940.00 |
| 2 | £1,940.00 | £38.80 | £19.40 | £58.20 | £1,881.80 |
| 3 | £1,881.80 | £37.64 | £18.82 | £56.45 | £1,825.35 |
| 4 | £1,825.35 | £36.51 | £18.25 | £54.76 | £1,770.59 |
| 5 | £1,770.59 | £35.41 | £17.71 | £53.12 | £1,717.47 |
| 6 | £1,717.47 | £34.35 | £17.17 | £51.52 | £1,665.95 |
| 7 | £1,665.95 | £33.32 | £16.66 | £49.98 | £1,615.97 |
| 8 | £1,615.97 | £32.32 | £16.16 | £48.48 | £1,567.49 |
| 9 | £1,567.49 | £31.35 | £15.67 | £47.02 | £1,520.47 |
| 10 | £1,520.47 | £30.41 | £15.20 | £45.61 | £1,474.86 |
| 11 | £1,474.86 | £29.50 | £14.75 | £44.25 | £1,430.61 |
| 12 | £1,430.61 | £28.61 | £14.31 | £42.92 | £1,387.69 |
After a full year of minimum payments, the balance has fallen from £2,000 to approximately £1,388, a reduction of only £612, despite paying roughly £612 in total. Almost exactly half of every pound paid has gone to interest.
Year 5 snapshot (approximately month 60): The balance is still in the region of £800, £850. Monthly minimum payments have fallen to around £24, £25, of which roughly £16 is interest. Progress has slowed considerably because the minimum itself has shrunk.
Year 10 snapshot (approximately month 120): The balance is in the region of £350, £400. Monthly payments are now below £15. The debt is still present more than a decade after the original £2,000 was borrowed.
Total interest paid at payoff: Under a strict minimum-only repayment schedule (no new spending, no fixed-floor minimum kicking in), the balance approaches zero after approximately 19, 20 years. Total interest paid over that period is approximately £1,900, £2,000, meaning the total amount repaid is close to double the original £2,000 borrowed. (Where a card's fixed floor minimum, for example £25, applies in later months, the timeline shortens somewhat, but total interest paid remains well above £1,500 in most scenarios.)
The FCA requires credit card providers to include a warning on statements when a customer pays only the minimum. Providers must show an estimated repayment period and the total interest cost under minimum-only repayments. This disclosure is a regulatory requirement, not a suggestion.
It is worth checking that figure on your next statement. The number of months listed can be a useful prompt to consider paying more.
What are the rules card providers must follow?
The FCA sets out specific requirements for credit card firms under its Consumer Credit sourcebook (CONC) and its Consumer Duty rules.
Minimum payment disclosures. Providers must display a warning on statements when you have paid only the minimum. The warning must include an estimated repayment period and total interest cost if minimum payments continue.
Persistent debt rules. The FCA introduced rules on persistent debt through PS18/4 (Credit card market study: persistent debt and earlier intervention, published 2018), implemented under CONC 6.7.27, 6.7.40. If a customer has been in persistent debt for 18 consecutive months, meaning they have paid more in interest and charges over that period than they have repaid from the principal, the provider must contact them and offer ways to repay more quickly. The process continues at 27 months and 36 months, with providers required to propose a repayment plan or, in some cases, suspend the card.
Affordability and Consumer Duty. The Consumer Duty, which came into force for existing products in July 2023 and is now an established part of FCA regulation, requires firms to act to deliver good outcomes for retail customers. That includes ensuring credit products represent fair value and that customers in financial difficulty are treated appropriately.
The persistent debt rules under PS18/4 and the Consumer Duty together mean providers cannot simply accept minimum-only payments indefinitely without actively intervening.
Why does the minimum payment shrink over time?
Because it is calculated as a percentage of a falling balance.
In month one on a £2,000 balance, 1% is £20. In month twelve, with the balance at approximately £1,388, 1% is around £14. The amount you pay falls each month, and so does the speed of repayment.
This means the headline "minimum payment" figure on your statement tells you surprisingly little about how quickly the debt will clear. The repayment period estimate, required by FCA rules to appear on your statement, is the more useful number.
What happens if you miss the minimum?
Missing a minimum payment has consequences beyond the immediate late fee.
- Your provider may apply a missed payment charge. The FCA's CONC rules require that default charges be a reasonable estimate of the cost caused by the breach; in practice, many providers charge in the range of £10, £12, though the exact amount depends on your credit agreement.
- A missed payment is reported to credit reference agencies and can remain on your credit file for six years.
- Your provider may increase your interest rate or remove promotional rate offers, depending on the terms of your agreement.
- Persistent missed payments can lead to default, which has more serious and longer-lasting consequences for your credit file.
Paying the minimum, even if it feels like very little, avoids all of these outcomes. The concern is treating it as a permanent strategy rather than a short-term measure.
What options are worth considering if the balance is not moving?
The most direct step is to pay more than the minimum each month, even by a small fixed amount. Beyond that, the options below are common ones worth looking into.
Pay more than the minimum where possible. Even a modest increase above the minimum can significantly reduce total interest paid and shorten the repayment period. Some card providers allow you to set a fixed monthly payment above the minimum by direct debit.
Check whether a balance transfer may be appropriate. Some credit cards offer a 0% or low-rate introductory period on transferred balances. There is usually a transfer fee. The balance needs to be cleared within the promotional period to get the full benefit, and eligibility is not certain. The MoneyHelper guide on balance transfers sets out how these work.
Contact your card provider. If the minimum is a stretch, providers are required under FCA rules to consider reasonable repayment arrangements. Asking is a useful first step.
Seek free debt advice. If multiple cards or debts are involved, free regulated advice can help you see the full picture.
Free debt help is available from:
- StepChange: 0800 138 1111 (stepchange.org)
- National Debtline: 0808 808 4000 (nationaldebtline.org)
- MoneyHelper: 0800 138 7777 (moneyhelper.org.uk)
Frequently asked questions
What is the minimum payment on a credit card?
The smallest amount your provider requires each month to keep the account current. It is usually calculated as a percentage of your balance or a fixed floor amount, whichever is greater. Paying only this amount means the bulk of your payment covers interest.
How long does it take to clear a card on minimum payments?
On a £2,000 balance at 24% APR with a 1% of balance plus interest minimum, repayment can take close to 20 years. The FCA requires providers to print an estimated repayment period on statements when only the minimum is paid. That figure is worth checking.
Does paying only the minimum affect my credit score?
Paying the minimum avoids a missed payment marker. However, keeping a high balance relative to your credit limit raises your credit utilisation ratio, which can weigh on your credit score over time. See our explainer on credit utilisation for more detail on how this ratio is calculated.
What is the FCA persistent debt rule?
A set of FCA rules (introduced through PS18/4 and set out in CONC 6.7.27, 6.7.40) requiring card providers to intervene when a customer has paid more in interest and charges than in principal repayment for 18 consecutive months. Further steps are required at 27 and 36 months. The aim is to ensure customers do not remain stuck in expensive long-term debt without the provider actively helping.
What if minimum payments feel unmanageable?
It can help to contact your card provider first. Providers must consider affordable repayment arrangements under FCA rules. Free debt advice is available from StepChange (0800 138 1111), National Debtline (0808 808 4000) and MoneyHelper (0800 138 7777).
Is it ever acceptable to pay the minimum?
In a short-term cash-flow squeeze, paying the minimum avoids missed payment consequences. The risk arises when it becomes a long-term habit. The longer a balance accumulates interest, the greater the total cost of borrowing.
Related reading
For a broader look at how credit cards work in the UK, the parent guide covers interest rates, statement cycles, and how providers set credit limits.
- Parent guide: Credit cards guide
- Tool: Loan repayment calculator
- Glossary: What is the minimum payment?
- Glossary: What is APR?
Sources
- FCA, PS18/4: Credit card market study, persistent debt and earlier intervention, including CONC 6.7.27, 6.7.40 (fca.org.uk/publications/policy-statements/ps18-4-credit-card-market-study-persistent-debt-and-earlier-intervention)
- FCA, Consumer Credit sourcebook (CONC), minimum payment disclosure requirements (fca.org.uk/firms/consumer-credit)
- Bank of England, Effective interest rates, credit card lending (bankofengland.co.uk/statistics/effective-interest-rates)
- MoneyHelper, Balance transfer credit cards (moneyhelper.org.uk/en/everyday-money/credit/balance-transfer-credit-cards)
- What is the minimum payment on a credit card?
It is the smallest amount your card provider requires you to pay each month to keep the account in good standing. It is usually a percentage of your balance (often around 1–2%) or a fixed floor amount, whichever is higher. Paying only this amount means most of your payment goes on interest rather than reducing what you owe.
- How long does it take to pay off a credit card on minimum payments only?
It depends on the balance, interest rate and how the minimum is calculated. On a £2,000 balance at 24% APR with a 1% of balance minimum, repayment can take well over 15 years. The FCA requires card providers to show an estimated repayment period on statements when only the minimum is paid.
- Does paying only the minimum affect my credit score?
Consistently paying the minimum keeps your account in good standing and avoids a missed payment marker. However, a persistently high credit utilisation — the proportion of your available credit you are using — can weigh negatively on your credit score over time.
- What is the FCA persistent debt rule?
The FCA requires card providers to contact customers who have been in persistent debt — paying more in charges and interest than they have repaid off their balance — for 18 consecutive months. Providers must offer options to help repay the debt more quickly. Further steps follow at 27 and 36 months.
- What can I do if minimum payments feel unmanageable?
A useful first step is to contact your card provider. Providers are required under FCA rules to offer affordable repayment arrangements. Free debt advice is available from StepChange (0800 138 1111), National Debtline (0808 808 4000) and MoneyHelper (0800 138 7777).
- Is it ever acceptable to pay the minimum?
In a short-term cash-flow squeeze, paying the minimum avoids a missed payment and its consequences. The risk is treating it as a long-term strategy. The longer a balance sits accumulating interest, the more expensive the total cost of borrowing becomes.