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Minimum repayments

One of the best ways to guarantee that you will always make your minimum repayment or that you will clear your outstanding balance is to set-up a Direct Debit. This will make sure you don’t miss any repayments and will avoid any charges for late payment.

You can make additional repayments at any time and by any method that is convenient for you. If you do not pay the full amount by Direct Debit, remember to allow enough time for your other payment to reach your account. There will normally be information that tells you how long you should allow for this to happen.

Card companies have agreed a debt advice health warning to appear on customer statements in response to concern regarding cardholders' only ever making the minimum repayment on a regular basis, with the objective of deterring such behaviour. This warning advises all customers that making only the minimum repayment each month means that money borrowed will take longer to pay in full, and that it will cost more in the long run.

Card companies have also agreed that additional information should be included within pre- or post-contract information in line with the Lending Code to highlight that the minimum repayment amount does not constitute a repayment schedule. This guideline was incorporated into the Lending Code in March 2005. The Lending Code now also requires that the minimum repayment you are asked to pay each month must be more than the amount of interest charged

Most credit card companies have a minimum monthly payment that you are required to pay on outstanding balances. For accounts that were offered before April 2011, this is usually either a percentage of the outstanding balance, typically between 2% and 5%, or a fixed amount, whichever is greater.

For accounts opened from April 2011 the minimum payments will be at least the total of any interest, fees and charges plus 1% of the outstanding balance.This ensures that you are always paying off at least some of the outstanding debt.


If you have an outstanding balance of £100 and the minimum repayment is 2% or £5, whichever is greater, then your minimum repayment will be £5 (not 2% of £100 which is only £2). However, if your outstanding balance is £1,000 your minimum repayment would be £20 (i.e. 2% of £1,000).

The Summary Box will tell you what the minimum repayment is, and your monthly statement will give exact details of the minimum repayment required in a given month.

If you fail to make the minimum repayment you are likely to be charged. Credit card companies share information on whether or not payments are made on time with the credit reference agencies. If you fail to make the minimum repayment, it could damage your credit record.

Making the minimum repayment could help you in the short-term if you have other financial priorities. In fact, if you are taking advantage of a 0% offer then it can make sense to make only the minimum payment. However, we do not recommend making the minimum repayment on a regular basis as it will cost you more and it will take you a longer amount time to clear your balance. The minimum repayment is NOT a suggested payment schedule. It gives you the flexibility to choose how much you borrow and how much you pay back. With most cards you can set up a Direct Debit to pay-off the minimum repayment each month. This will ensure you will avoid ever incurring a late payment fee. Do not make the minimum payment on a long-term basis.

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