# The minimum payment trap: why paying the minimum keeps you in debt > Credit cards & loans · Last updated 23 June 2026 Canonical HTML: https://moneyguide.org.uk/credit/minimum-payment-trap/ Markdown mirror: https://moneyguide.org.uk/credit/minimum-payment-trap.md ## Quick answer Paying only the minimum on a credit card covers mostly interest and barely reduces the balance. A £2,000 balance at 24% APR with a 2% minimum payment would take over 25 years to clear and cost more than £3,500 in interest. Credit card minimum payments are designed to keep you borrowing. They are typically 1–3% of the balance or £5, whichever is higher. Paying the minimum satisfies the lender but means your debt shrinks painfully slowly while interest accumulates. Understanding the maths is the first step to escaping. ## Key facts - Minimum payments are usually 1–3% of the outstanding balance plus any interest and fees - At typical APRs of 20–25%, minimum payments barely cover monthly interest on large balances - A £2,000 balance at 24% APR with 2% minimum payments takes 25+ years to clear - Paying even £20–£50 above the minimum dramatically shortens repayment time and cuts total interest ## How minimum payments are calculated Most UK credit cards set the minimum as the greater of a fixed sum (often £5–£25) or a percentage of the balance — typically 1% to 3% — plus any interest, fees, or insurance charges from the previous month. As the balance shrinks, the minimum payment shrinks too, stretching repayment over decades. ## The real cost in numbers On a £2,000 balance at 24% APR with 2% minimum payments: the first payment is about £40, mostly interest. After five years you have paid roughly £1,200 but still owe about £1,400. Paying a fixed £80 per month instead clears the same £2,000 balance in about 30 months and costs around £400 in interest — saving over £2,900. ## Breaking free from the trap Set a fixed monthly payment above the minimum — even £20 extra makes a significant difference. Treat it like a loan with a fixed end date. If you cannot pay more, a 0% balance transfer card gives you a window to pay down the principal without interest accumulating. If minimum payments are unaffordable, contact the lender or a free debt charity before missing payments. ## Frequently asked questions ### Does paying the minimum hurt my credit score? Paying the minimum on time avoids missed-payment marks, but high utilisation (using a large share of your limit) hurts your score regardless of whether you pay the minimum or more. ### Can my lender increase the minimum payment? Yes. Lenders can change minimum payment formulas. They usually give notice, but persistent minimum-only payments may trigger higher minimums. ### Is it ever OK to pay just the minimum? Briefly, during a genuine cash crisis, paying the minimum protects your credit file. But it should be a short-term measure with a plan to increase payments. ## Primary source https://www.gov.uk/consumer-protection-rights/credit-cards ## Related - [0% credit cards explained](https://moneyguide.org.uk/credit/0-percent-credit-cards-explained/) - [Balance transfer cards](https://moneyguide.org.uk/banking/balance-transfer-cards-explained/) --- Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Money Guide is not a financial adviser and does not currently earn commission on credit cards. This guide is educational information only — always check the issuer's own terms, eligibility checkers and fees before applying. 18+, subject to status. Credit is a commitment: only borrow what you can repay in full each month, because interest charges erase every reward on this page.