How much is the minimum payment on a credit card?

There’s no universal minimum payment for credit cards; it can vary depending on the credit card provider, your debt, the type of card, and your personal circumstances.

What’s more, card providers don’t all follow the same calculation and payment method. Some may charge a flat rate, while others charge a percentage of your outstanding balance. Many card issuers use a combination of these two methods.

Let’s take a look at the different ways credit card providers may calculate the minimum payment, how to check yours, and the effects of only paying the minimum.

How is the minimum payment on a credit card calculated?

It’s common for credit card issuers to have more than one way of determining your minimum payment. It can be either a flat rate (e.g., £20) or a percentage – some card providers only charge a percentage of your statement balance, while others also add the cost of interest and fees into the calculation.

You might see these two balances on your credit card statement:

• The current balance, also known as the ‘full’ or ‘total’ balance. The current balance is the total amount you owe the credit card provider, accounting for all activity on your card until the present. This includes unpaid balances, interest charges, and recent transactions.

• The statement balance. This is the total amount due at the close date, which is the end of your billing cycle (also known as a billing period). The statement balance includes all charges made during the billing period, but it doesn’t factor in those made after the billing cycle closes. A billing cycle is the period between statements’ closing dates. It’s usually between 28-31 days, but credit card providers can have different cycles – e.g., some may use a 30-day billing cycle while others may use calendar months. It’s always best to check with your provider if you aren’t sure.

Only the statement balance is used to calculate the minimum monthly payment, so the calculation depends on the billing cycle as it’s likely your balance will differ from one month to the next.

Here’s a quick overview of the ways credit card minimum payment terms are determined:

1. As a percentage of the statement balance. Some card providers only factor your statement balance (inclusive of interest) into their calculation, and this is usually a relatively higher percentage – e.g., 2-4%.

2. As a percentage of the statement balance, plus interest and fees. Some credit card providers charge a percentage of your statement balance, and separately add the interest and any fees accrued during the billing period to the result. When card providers use this method, they usually charge a lower percentage of the card balance – around 1%.

Some providers may charge you a fixed amount if the percentage of your outstanding balance is less than the flat rate for that billing cycle. This means you could be charged a fixed amount if your account balance is under a certain amount. For example, a card’s terms might specify that the minimum payment is 3% of your card balance or a flat rate of £35, depending on which figure is higher. It can be helpful to speak to your card provider, or an independent financial advisor, before applying for a credit card – or even during the application process – to better understand how the provider plans to bill you and determine the minimum amount.

What if my statement balance is less than the flat rate?

So, what if your statement balance is less than this flat rate, or if it’s zero? In general, credit card providers usually charge you the full statement balance if it’s less than the flat rate. So, for example, if the minimum flat rate is £25, but you only borrowed £10, they’ll charge you £10 as the minimum.

Where can I check my card’s minimum payment?

You can usually find your card’s minimum payment by:

• Checking your credit card statement. Your credit card statement includes the minimum payment for the billing cycle, along with other information like your card balance, interest rates, and any fees that apply. You can usually log in to your credit card account online – either on the web or via the card issuer’s app – to view your statement and the minimum payment.

• Contacting your card issuer. Can’t find your minimum payment, or not sure if it’s correct? Then it’s a good idea to contact your credit card provider directly.

What are the effects of only paying the minimum amount?

There are times when you might be unable to pay more than the minimum payment. However, consistently paying no more than the minimum amount each billing cycle can have drawbacks:

• It takes longer to clear your debt. Although paying the minimum gives cardholders more time to repay their debt, the repayments may not count towards paying their actual balance. Unless you’re using a zero-interest credit card, a portion of the payment will go towards paying off any interest accrued during the billing cycle, depending on your APR and balance. Interest fees will then apply to the unpaid balance. So by only paying the minimum amount each month, you’ll likely accrue more interest over time, increasing the total balance. If you spend more in the following month this will increase the balance further, which will have a knock-on effect on the interest charged. Ultimately, this can mean it’ll take longer to clear your debt. The more of your balance you pay off each month, the less interest you’ll end up paying over time, meaning the balance can be cleared faster. Most credit card issuers do not charge interest fees if you pay off your balance in full each billing cycle.

• It could decrease your credit score. Only making the minimum payment won’t affect your credit score directly. But if you were to use a significant amount of your credit limit on a regular basis and consistently make only the minimum monthly repayments, you’ll have a higher credit utilisation rate. This is the amount you spend relative to the credit limit available to you, expressed as a percentage, and it can affect your credit score. A high credit utilisation rate may have a negative impact on your score, because it can signal to lenders that you’re overly reliant on credit which can suggest you’re in financial difficulty. It’s generally beneficial for your credit score to keep your credit utilisation rate around 30% to avoid a negative effect on your credit score. Paying more than the minimum amount each month should reduce your credit utilisation rate on your credit card.

What if I can’t pay the minimum payment?

If you don’t make the minimum payment, credit card providers will consider it a ‘missed payment’ and may charge you a late fee. Missed payments can occasionally trigger a penalty annual percentage rate (APR), which is a higher interest rate that will apply to your future purchases – although this can vary between lenders.

Credit card providers will report late or missed payments to the credit reference agencies (CRAs). A late payment is recorded as a negative marker on your credit report. A single missed payment is unlikely to seriously affect your credit score, but multiple missed payments can.

You can learn more about how late payments can affect your credit score here: Adverse credit history explained

If you’re unable to pay the minimum, contacting your credit card issuer and explaining your circumstances can help. They might offer different solutions depending on your situation, like extending the due date, temporarily freezing the interest, negotiating a payment plan, or even restructuring the debt to make a more affordable arrangement.

However, it’s important to check the impact that any of these alternative arrangements might have on your credit score. For example, an arrangement to pay – which is when an alternative arrangement for the monthly payments is made outside of the original agreement – can have a negative effect.

To recap:

Credit card providers determine the minimum payment in different ways. They often charge a flat rate for lower balances and a percentage of the statement balance for higher ones. They can also calculate minimum payments differently; some charge a higher flat percentage, while others use a lower flat percentage in their calculations but add interest and fees at the end.

You can usually find your minimum monthly payment by checking your credit card statement. If you’re having trouble finding it, or if the amount seems incorrect, it’s best to contact the card issuer directly.

Making the minimum payment gives you more time to repay debt, but it’s important to keep in mind that interest accrues on unpaid balances (unless you have a zero-interest card), increasing the total balance due to be repaid. If you can afford it, paying more than the minimum helps clear the outstanding balance faster.

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