The minimum payment is set by your credit card provider. It’s important to meet your minimum repayment each month to help you manage your debt and avoid credit card charges.
You’ll usually be expected to pay a small percentage of your monthly credit card balance – normally about 2%. Some credit card providers may ask you to pay a flat fee instead.
Ideally, you should aim to pay off your balance in full every month or as much as you can.
Only making the minimum repayment on your credit card can mean it takes you longer to clear a credit card debt, and you could pay a significant amount in interest.
If it helps, you can stagger your repayments throughout the month, so you chip away at the debt. Setting up a Direct Debit can also help you reduce credit card debt and avoid late fees.
See how you could reduce the interest and balance quicker by increasing your monthly payment.
Your minimum payments are calculated based on the amount you owe, plus your annual interest rate.
For example, if your minimum payments are set at 2% and you borrowed £1,000 on your credit card, you’ll need to repay at least £20 a month (plus the interest rate).
Your credit card provider will usually tell you your minimum payment.
You can find your minimum repayment on your monthly credit card statement, or by accessing it via online or mobile banking.
If you still can’t find it, you can also speak to your credit card provider.
Missed or late payments can negatively affect your credit score. But if you’re making a minimum payment that covers most of your monthly credit card balance, it’s unlikely to affect your credit score.
It’s important to only borrow what you can afford to pay back. When you keep using your credit card without making higher repayments to clear your balance, your credit card debt can grow.
This can negatively affect your credit score since you’ll appear to borrow larger amounts. To some lenders, this can show that you’re struggling to manage financially and get out of debt.
Paying more towards your credit card debt and staying under your credit card limit can help improve your credit score.
