// Source citations for the factual claims in this guide (kept out of the // rendered tree: flow-level MDX comments break Next scroll-on-navigation). export const sources = [ "Worked example computed with the repo engine logic in site/lib/credit-card-minimum.ts (model hand-verified in site/lib/credit-card-minimum.test.ts): £3,000 at 24.9% APR, minimum 2.5% of the post-interest statement or £5 floor. Minimum-only path: first minimum £76.56, clears in 653 months (54y 5m), £12,413.60 interest, £15,413.60 total paid. Fixed £76.56 every month: clears in 82 months (6y 10m), £3,252.59 interest. Difference: 571 months and £9,161 of interest. The "2.5% or £5" minimum rule is a common UK card term, contractual not statutory.", "FCA persistent debt rules (CONC 6.7, introduced via PS18/4, in force since 2018): verified 2026-06-11 against https://www.fca.org.uk/news/press-releases/new-credit-card-rules-introduced-fca and https://www.fca.org.uk/publication/policy/ps18-04.pdf, as cited in site/lib/credit-card-minimum.ts and site/app/(site)/tools/credit-card-minimum/page.tsx.", ];

Guide · 4 minute read

What happens if you only pay the minimum on your credit card?

On a typical card, decades of payments. A £3,000 balance at 24.9% APR on a "2.5% or £5" minimum takes about 54 years to clear and costs roughly £12,400 in interest. Fixing your payment at this month's minimum (£77) clears it in under 7 years.

The maths of a shrinking payment

The minimum payment on most UK cards is a percentage of your statement balance, often around 2.5%, with a small pound floor such as £5. Because it is a percentage, it shrinks every month as the balance falls. Your first payment on a £3,000 balance at 24.9% APR is about £77. A year later it is smaller. A decade later it is smaller still, and most of it is going on interest rather than debt.

Run that balance through our credit card minimum payment calculator and the minimum-only path takes 653 months, which is 54 years and 5 months, and costs £12,414 in interest on top of the £3,000 you borrowed. You repay more than five times what you spent, one shrinking payment at a time.

The trap is not that the payments are unaffordable. It is that they are calibrated to sit only just above the interest added each month, so the slice that actually repays debt is tiny and gets tinier. At higher APRs with weak minimum rules the payment can fail to outrun the interest at all, and the balance never falls.

Why minimums are designed this way

A credit card earns the lender interest for as long as the balance exists. A minimum that cleared debt quickly would end that income early; a minimum that obviously trapped people would draw regulatory fire. The "small percentage with a floor" formula sits in between: it always looks manageable, it technically clears the debt eventually, and it maximises the months the balance stays open. None of this is hidden, it is simply how the product is built, and the statement small print spells out the formula. What it never spells out is the payoff date.

The regulator noticed: persistent debt rules

The FCA introduced rules on exactly this pattern in 2018 (policy statement PS18/4, now in its consumer credit sourcebook at CONC 6.7). If you pay more in interest, fees and charges than you repay of the balance over an 18 month window, you are classed as in persistent debt, and your card provider must act:

• At 18 months, contact you, explain the cost of carrying on, and prompt you to pay more.
• At 27 months, remind you, and warn that the card may later be suspended.
• At 36 months, propose a way to repay the balance over a reasonable period, usually 3 to 4 years. If you genuinely cannot afford that, the firm must show forbearance, which can include reducing, waiving or cancelling interest and charges.

These rules are a safety net, not a plan. Waiting for the 36 month letter means three more years of interest first.

The escape: fix your payment

You do not need spare money to beat the trap, you need to stop the payment shrinking. Look at this month's minimum, then set a standing order for that exact amount every month and ignore the falling minimum on future statements.

On the £3,000 example, fixing the payment at the first minimum of £76.56 clears the card in 82 months instead of 653, and costs £3,253 in interest instead of £12,414. Same pound amount on day one, 47 years sooner, £9,161 cheaper. The standing order also removes the decision from your future self, which is most of the battle.

If you can pay more than this month's minimum, even slightly, the curve bends further; the calculator lets you test any fixed amount against your own balance and APR. A 0% balance transfer can help too, provided you watch the transfer fee and clear the balance before the promotional period ends.

More than one card?

Fix the payment on every card, then aim anything spare at one of them: the highest APR first is mathematically cheapest (avalanche), the smallest balance first gives faster wins (snowball). Our debt payoff planner compares both orders on your actual debts, and the budget planner helps find the spare pounds to throw at them.

Common questions

How long does it take to pay off £3,000 paying only the minimum?

On a common '2.5% or £5' minimum at 24.9% APR, about 54 years and roughly £12,400 in interest, because the payment shrinks with the balance. Fixing the payment at the first month's minimum of about £77 clears the same debt in under 7 years.

Why are credit card minimum payments so low?

The minimum is set as a small percentage of the balance, just above the monthly interest and charges. That keeps each payment looking affordable while the balance, and the lender's interest income, lasts as long as possible. The formula is contractual, set by the card, not by law.

What is persistent debt on a credit card?

An FCA classification (CONC 6.7, introduced in 2018 via policy statement PS18/4). If you pay more in interest, fees and charges than you repay of the balance over 18 months, your provider must contact you at 18 and 27 months and, at 36 months, propose repayment over usually 3 to 4 years or offer forbearance such as reduced or waived interest.

Does only paying the minimum hurt my credit score?

Paying at least the minimum on time keeps the account in good standing, so there is no missed-payment mark. But a balance that barely falls keeps your credit utilisation high, which lenders read as risk, and carrying the debt for decades costs far more than any score effect.

Is a 0% balance transfer better than fixing my payment?

Often the two combine well. A 0% transfer stops interest for the promotional period so every pound repays debt, but watch the transfer fee (typically 3 to 5%) and have a plan to clear the balance before the 0% ends. Fixing your payment costs nothing and works on any card, transferred or not.

Guidance and education, not regulated financial advice.