Glossary · UK
What is Credit Card Minimum Payment?
The smallest amount a credit card provider requires you to pay each month to keep the account in good standing and avoid late fees.
Full Definition
A credit card minimum payment is the lowest sum you must pay by the statement due date to stay current and avoid late-payment charges or damage to your credit file. In the UK, providers typically set it as a small percentage of the outstanding balance (commonly around 1% to 3%) plus any interest, fees and charges, subject to a small floor such as a few pounds. Since 2011, FCA rules require the minimum to cover at least all interest, fees and charges plus 1% of the principal, so the balance always reduces a little. Paying only the minimum is expensive: because interest compounds on the remaining balance, repayment can stretch over many years and cost far more than the original spending. Your statement must show how long full repayment would take if you pay only the minimum. Wherever possible, clear the full balance each month, or at least pay more than the minimum, to cut interest. Use a compound-interest calculator to see how balances grow.