Minimum payments and paying off your balance

Where the payment goes

Interest and fees can use up part of a repayment. The amount left reduces what you borrowed. The minimum-payment formula depends on your agreement, so use your statement rather than a percentage you have seen elsewhere. The FCA’s rules set minimum-repayment requirements, with exceptions; they do not make every card’s calculation identical.

Why progress can slow down

Some minimum payments fall as the balance falls. That can make this month’s bill easier to meet while extending the time needed to finish repaying. MoneyHelper explains why paying more, where affordable, can help.

What a fixed payment could change

Here is an illustration from our calculator, using a £2,500 balance and a constant 24.9% effective annual interest rate. It assumes no new spending or fees, monthly interest rounded to pennies and payments at month end.

These are fixed payments, not a simulation of a lender’s changing minimum. Your provider’s daily interest calculation may produce different results.

Start with an amount you can maintain

In that example, another £50 a month reduces the time by six months and the interest by £149.43. But the larger payment is only useful if it fits the rest of your budget.

Try your own figures, then ask what would happen in an expensive month. Would the plan still leave room for groceries, bills and an unexpected cost? A sustainable payment is a more honest starting point than a target you already know will be difficult.

Keep new spending in the picture

The calculator assumes the card is not used again. If you pay £150 and then put £150 of purchases back on it, the real account will not follow that illustration. Write down any spending you still need the card for before relying on a payoff estimate.

If you cannot cover the minimum, use our support guide rather than repeatedly increasing a calculator figure until the result looks reassuring.