Clearing credit card debt
Why the minimum payment is a trap, how a fixed amount clears the balance far faster, and where balance transfers fit.
Paying only the credit card minimum each month is the slowest, most expensive way to clear a balance. Because the minimum shrinks as the balance falls, the debt can drag on for decades and the interest piles up. Switch to a steady fixed amount and the same balance clears in a small fraction of the time, for a small fraction of the interest.
The short version
- The minimum payment is the least your provider will accept, often the greater of 1% of the balance plus that month's interest, or £5.
- Paying only the minimum stretches the debt over decades, because the payment drops every time the balance does.
- Paying a fixed amount every month clears the balance far faster and saves a large chunk of interest.
- A 0% balance transfer can buy interest-free time to clear it, if you mind the transfer fee and the revert rate.
- Every figure here is an estimate to plan with, not financial advice.
Here is the gap on a £3,000 balance at 24.9% APR. The APR is the annual percentage rate, the yearly cost of borrowing including interest. One column pays only the minimum; the other pays a steady £150 a month.
| Minimum only | Fixed £150 a month | |
|---|---|---|
| Time to clear | About 28 years | About 26 months |
| Interest paid | Around £5,400 | Around £790 |
| Total repaid | Around £8,400 | Around £3,790 |
Same balance, same rate. The only difference is keeping the payment steady instead of letting it fall with the balance. These are estimates from our model; your card's exact rules will shift the numbers a little.
Two ways to pay it back
With a single credit card you really have two choices each month. You can pay the minimum payment, the smallest amount the provider will accept, or you can pay a fixed amount you decide on and stick to. Paying the full statement balance clears it outright and costs no interest, which is always the cheapest option if you can manage it. This article is about the gap between the other two, because that is where most of the cost hides.
How minimum payments work
A common UK rule sets the minimum at the greater of two figures: 1% of the balance plus that month's interest, or a flat £5. So on a £3,000 balance the 1% slice is £30, and the interest for the month is added on top. The exact formula varies between cards, and some use a slightly higher percentage, so the precise figure is on your statement, but the shape is the same everywhere: the minimum is deliberately small.
The interest itself comes from the APR. To work out a month's interest, the yearly rate is converted to a monthly one using the formula (1 + APR ÷ 100) to the power of one twelfth, minus 1, then applied to the balance you still owe. At 24.9% APR that works out at roughly 1.87% a month, so a £3,000 balance is charged about £56 in interest in the first month alone.
Why the minimum traps you
The catch is that the minimum is a percentage of the balance, so it falls every time the balance does. Pay a little off this month and next month's minimum is a little smaller, which means you chip away even less, which keeps you paying interest for longer. The repayment stretches out instead of speeding up.
On the £3,000 balance at 24.9% APR, paying only the minimum drags the debt out for roughly 28 years and costs about £5,400 in interest, well over the amount you originally borrowed. That is the trap: the system is designed to keep you paying, and doing the bare minimum quietly costs you the most. Our credit card repayment calculator lets you put in your own balance and rate to see how long the minimum would really take.
Paying a fixed amount
The fix is simple: pick an amount you can afford and pay that same figure every month, even as the balance drops. Because the payment no longer shrinks, more of it goes on the balance each month rather than on interest, and the debt falls away quickly.
Holding the £3,000 payment at £150 a month clears it in around 26 months and costs roughly £790 in interest, against about £5,400 on the minimum. That is the same money problem solved in about a fortieth of the time for roughly a seventh of the interest. Even a smaller fixed amount, paid consistently, beats the minimum handily, because the trap is the falling payment rather than the size of any single one. Setting up a standing order for the fixed figure keeps it steady without you having to think about it.
0% balance transfers
A balance transfer moves what you owe from one card to another that charges 0% interest for a set period, often well over a year. With no interest building up, every pound you pay goes straight onto the balance, so a transfer can be a powerful way to clear a debt, as long as you treat it as a deadline rather than a let-off.
Two things to watch. First, the transfer fee, usually around 2% to 4% of the amount you move, added to the new balance up front; so moving £3,000 might cost £60 to £120. Second, the revert rate, the standard interest rate the card switches to once the 0% period ends, which is often high. The plan is to clear the balance, or move it again, before that happens. Paying late or missing a payment can also end the 0% deal early, and spending on the new card usually sits outside the offer, so it is best left for the transferred balance only. For the full mechanic, our guide on how balance transfers work covers the fee, the revert rate and money transfer cards in detail.
Persistent debt and getting help
UK rules from the Financial Conduct Authority (FCA), the regulator for consumer credit, set up a backstop called the persistent debt rule. If you have paid more in interest, fees and charges than you have repaid of the actual balance over an 18-month period, your card provider has to step in. The first step is usually a letter explaining that increasing your payments would mean paying less overall, and suggesting you get in touch.
If the pattern carries on, the help escalates, and after a longer stretch the provider may have to offer a way to clear the balance over a reasonable period, or show forbearance such as reducing or waiving interest and charges. The rule is a safety net, not a plan; it is far better to clear the balance on your own terms first.
If even the minimum is a stretch, get free help early rather than waiting. MoneyHelper, Citizens Advice and the main debt charities give free, confidential advice. If you are weighing up several debts at once, our guide on how to pay off debt covers the order to tackle them in, and budgeting basics can help you find the spare money to put towards a fixed payment.
Common questions
- What is the minimum payment on a credit card?
- It is the smallest amount your card provider will accept that month to keep the account in good standing. A common UK rule is the greater of 1% of the balance plus that month's interest, or a flat £5. The exact rule varies by card, so check your statement, but the figure is always set low on purpose.
- How long does it take to clear a credit card paying only the minimum?
- Far longer than most people expect. On a £3,000 balance at 24.9% APR, paying only the minimum stretches the debt over roughly 28 years and costs about £5,400 in interest, because the minimum shrinks as the balance falls. Pay a steady £150 a month instead and the same balance clears in around 26 months. These are estimates from our model.
- Does paying only the minimum hurt my credit score?
- Making the minimum on time is recorded as paying on time, so on its own it does not mark your file as missed. But a balance that barely moves keeps your credit utilisation high, which is how much of your available limit you are using, and high utilisation can hold your score back. Clearing the balance faster usually helps both your score and your wallet.
- Is a 0% balance transfer worth it?
- It can save a lot of interest if you use the interest-free window to actually clear the balance rather than just move it. Weigh the transfer fee, usually around 2% to 4% of the amount moved, against the interest you would otherwise pay, and set a payment that finishes the balance before the 0% ends. Avoid spending on the new card, as purchases often sit outside the deal.
- What happens when the 0% balance transfer period ends?
- Any balance still on the card starts attracting the revert rate, the standard interest rate the card charges once the deal is over, which is often high. Missing a payment or paying late during the deal can also end the 0% early. The aim is to have the balance cleared, or moved again, before the interest-free period runs out.
- What if I cannot afford more than the minimum?
- You are not stuck. Free, confidential debt advice is available from MoneyHelper, Citizens Advice and the major debt charities, and they can talk through options at no cost. If you have several debts to juggle rather than one card, our guide on how to pay off debt covers the order to tackle them in.
About this article
Written by the calcd team. We build UK money calculators and explain the numbers behind them in plain English. We checked this article against MoneyHelper and the Financial Conduct Authority. The repayment figures come from our own credit card model and are estimates to help you plan, not financial advice. Real cards vary their minimum-payment rules, APRs and balance-transfer terms, so confirm the details with your provider or a qualified adviser. Last updated June 2026.