Key facts
- Minimum payment is usually 1% of the balance plus interest, or a £5 to £25 floor
- On £2,000 at 26%, minimum payments take over 25 years and cost around £3,670 in interest (Experian)
- On £3,000 at 19%, minimum payments take about 27 years and cost £4,192 in interest (FCA)
- A fixed payment of £59 or £108 clears the same balances in under 5 years and 3 years
See your own timeline with the credit card payoff calculator and plan a payoff order with the debt repayment calculator.
| Balance and APR | Minimum payments | A fixed payment instead | Interest saved |
|---|---|---|---|
| £2,000 at 26% | 25 years 3 months, £3,670 interest | £59 a month: 4 years 8 months, £1,297 interest | £2,373 |
| £3,000 at 19% | 27 years, £4,192 interest | £108 a month: 3 years, £879 interest | £3,313 |
Sources: Experian (£2,000 example) and the FCA (£3,000 example). Figures assume no further spending.
The Financial Conduct Authority found that around 4 million UK cardholders are in persistent debt, paying an average of £2.50 in interest and charges for every £1 they borrow. Under the 2018 rules, your provider must contact you once you have paid more in interest and fees than principal for 18 months, and must offer further help, such as a repayment plan or reduced charges, if you are still in persistent debt after 36 months.
Clearing expensive card debt usually comes before saving or investing: see emergency fund guide for the buffer to build first, and compound interest guide for why the same maths works against you on a card.
How Minimum Payments Are Calculated
UK credit card minimum payments are typically calculated as the higher of:
- A fixed amount (usually £5 to £25)
- A percentage of the outstanding balance (typically 1% plus interest)
- The interest charged that month plus a small amount of principal
Because the minimum payment is tied to the balance, it falls as the balance falls. This means you pay less and less each month, which sounds good but is actually the problem. The balance shrinks agonisingly slowly, and interest keeps compounding on whatever remains.
The True Cost: A Real Example
Experian worked through a £2,000 balance at 26% APR: minimum payments take 25 years 3 months and cost £3,670 in interest. Fixing the payment at £59 a month clears it in 4 years 8 months for £1,297 in interest, saving £2,373. The FCA used a £3,000 balance at 19%: minimum payments take about 27 years and cost £4,192, while a fixed £108 a month clears it in 3 years for £879.
| Scenario | Monthly Payment | Time to Clear | Total Interest | Total Paid |
|---|---|---|---|---|
| Minimum payments | Falling as balance shrinks | 25 to 27 years | £3,670 to £4,192 | See examples above |
| Fixed £59/month (£2,000 at 26%) | £59 | 4 years 8 months | £1,297 | £3,297 |
| Fixed £108/month (£3,000 at 19%) | £108 | 3 years | £879 | £3,879 |
| Fixed £150/month (illustrative) | £150 | Varies by balance | Lower interest | Faster payoff |
Experian and FCA examples assume no further spending. Your own card may use a different minimum formula.
The Minimum Payment Illusion
Minimum payments are designed to feel manageable. On a £2,000 balance at 26%, your first minimum payment might be only a few tens of pounds above the interest charge, so very little principal is cleared. The card provider profits; you stay in debt for decades.Credit Card Payoff Calculator
Enter your balance, APR, and monthly payment to see your exact payoff date, total interest, and how much you save versus minimum payments.
Why Interest Compounds Against You
Credit card interest is calculated daily on your outstanding balance. Each day you carry a balance, a small fraction of your APR is added. Because the interest is added to the balance, next month's interest is calculated on a slightly higher amount. That is compounding working against you, as explained in our compound interest guide.
At 26% APR, the daily rate adds up quickly on a carried balance. A minimum payment that barely exceeds the interest charge can leave you in debt for over 25 years, as the Experian example shows.
The Balance Transfer Solution
A 0% balance transfer card pauses interest charges while you repay the principal. This is the single most effective tool for escaping credit card debt, but it requires discipline.
| Balance Transfer Feature | Typical Value (2026) |
|---|---|
| 0% introductory period | 12 to 29 months |
| Balance transfer fee | 1% to 3% of amount transferred |
| Revert APR after intro period | 20% to 30% |
| Required credit score | Good to excellent |
Balance Transfer Strategy
Transfer your balance, divide the total by the number of 0% months, and pay that fixed amount each month. Set a direct debit so you never miss a payment. If you still have a balance when the 0% period ends, transfer again if possible, or the interest will jump to the revert rate.Avalanche vs Snowball: Clearing Multiple Cards
If you have multiple credit cards, two strategies can help you pay them off faster:
- Avalanche method: Pay minimums on all cards, then throw every extra pound at the highest-APR card first. Mathematically optimal, minimises total interest paid.
- Snowball method: Pay minimums on all cards, then target the smallest balance first. Psychologically powerful: quick wins build momentum and research suggests it keeps more people on track.
Your 5-Step Action Plan
- Stop using the card for new spending while paying it down, otherwise you are filling a leaking bucket
- Calculate your payoff date at your current payment versus a fixed higher amount using our calculator
- Check your eligibility for a 0% balance transfer, even a 2.5% transfer fee saves thousands versus carrying a high APR
- Set a fixed direct debit above the minimum, never let it revert to minimum-only
- Use freed-up payments to tackle the next debt (avalanche or snowball) once a card is cleared
Related Calculators
Frequently Asked Questions
Most UK credit card issuers set minimum payments as the higher of a fixed amount (typically £5 to £25) or a percentage of the balance (usually 1% plus interest). Some cards use 2% of the total balance including interest. The exact formula varies by provider and is stated in your credit agreement.
It depends on the balance and APR. Experian calculated that a £2,000 balance at 26% APR takes 25 years 3 months on minimum payments. The FCA used a £3,000 balance at 19% and found about 27 years. A fixed payment clears the same debts in under 5 years and 3 years respectively.
Under FCA rules introduced in 2018, if you have paid more in interest and charges than you have repaid in principal over 18 months, your card provider must contact you. After 36 months of persistent debt, the provider must offer ways to repay more quickly, including suspending the card if necessary.
A 0% balance transfer can save hundreds or thousands in interest. Transferring a £5,000 balance from a 22% APR card to a 0% card for 24 months saves approximately £2,200 in interest if you repay in full. Transfer fees are typically 1% to 3% of the balance (£50 to £150 on £5,000).
Pick the highest fixed amount you can comfortably afford and keep paying that every month, rather than letting the minimum shrink with the balance. Even £20 to £30 above the minimum makes a large difference over time. On a £2,000 balance at 26%, fixing the payment at £59 clears it in under 5 years instead of over 25.
Paying the minimum on time keeps your score positive because you are meeting the agreement. The bigger risk is a high credit utilisation ratio: using more than 30% of your limit can lower your score, and minimum payments keep the balance high for years. Paying more reduces utilisation and helps your score.
The average UK credit card APR is around 23% to 27% in 2026, with store cards often 30% to 40% and the best deals for strong credit around 13% to 18%. Anything below 20% is considered good. Interest is charged daily, so a high APR adds up quickly on a carried balance.
Fix your monthly payment instead of paying the shrinking minimum, and clear the highest-APR card first. A 0% balance transfer can pause interest for 12 to 29 months for a 1% to 3% fee, which helps if you clear it in the period. Stop new spending on the card while you pay it down.
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James Hartley is a Chartered Management Accountant (CIMA) with more than eight years of experience in UK tax, payroll and compliance. He holds a BSc in Finance and Economics from the University of Manchester and spent his early career at a Big 4 accounting firm. He founded WhatsUK to build free UK financial calculators and guides verified against official HMRC sources. He authors every calculator and article on WhatsUK.
Sources & Official References
- FCA - Credit Card Market Study- FCA persistent debt rules and minimum payment regulations
- Experian - Credit Card Minimum Payments- £2,000 at 26% worked example
- MoneyHelper - Credit Cards- Guidance on managing credit card debt
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Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.