What is a credit card minimum payment?
A minimum credit card payment is the smallest amount a cardholder could potentially pay to keep the account in good standing.
This may include a percentage of the outstanding balance, plus any fees or interest charges. Only paying the minimum amount could impact your credit score, lead to long-term debt and increase interest costs – so we suggest paying more if you can afford to.
Estimated read time: 6 mins
What is a minimum payment?
When you have a credit card, you’ll need to make payments toward your credit card balance. For a recurring payment like Direct Debit, you’ll typically have one of three options:
- Pay your balance in full
- Pay a fixed amount or percentage of your balance (you choose how much to pay for these - as long as it's above your minumum amount)
- Pay the minimum amount
Most credit cards allow you to make manual payments for any amount at any time. Your monthly credit card statement should show your minimum monthly payment amount and full balance.
The minimum payment amount is a percentage of your total credit card balance. At Vanquis all our cards have a minimum repayment of 1% of your total balance due. It may also include any fees and the interest on your account since your last credit card statement.
Keep paying at least the minimum monthly payment on your credit card, as missed and late payments may lead to extra fees and harm your credit rating.
This may make it more difficult to get credit in the future.
How is a minimum payment on a credit card calculated?
Minimum payments are usually based on a percentage of your balance plus interest, fees and charges or a fixed amount. For example, if your balance is £100 and your card charges 2.5% monthly interest, your minimum payment might be around £2.50. But if your card has a fixed minimum payment (say £25), you’d pay that instead of monthly interest, your minimum payment might be around £2.50. But if your card has a fixed minimum payment (say £25), you’d pay that instead.
How to find out the minimum payment on my credit card?
You can find the minimum payment for your credit card on your monthly statement, which should outline the required amount.
This payment may be a percentage of your outstanding balance, often around 2% to 3%, plus any fees or interest. As mentioned earlier, at Vanquis all our cards have a minimum repayment of 1% of your total balance due.
You can also log into your online account or mobile app, where your minimum payment should be shown clearly. If you’re unsure, reach out to your card issuer’s customer service team.
Remember, paying only the minimum can lead to high interest and long-term debt. So, consider your overall financial situation when making payments.
Why should I pay more than the minimum payment?
Paying more than the minimum payment on your credit card may greatly reduce your overall debt and interest costs.
When you pay only the minimum, most of your payment goes towards interest, leaving you in debt for longer. Paying extra reduces the principal balance faster, which lowers future interest charges.
Paying more may improve your credit utilisation ratio (the percentage of your total available credit that is being used). This could boost your credit score and overall financial health.
This could represent a smart move for long-term financial stability.
How to pay a credit card minimum payment
To pay your credit card minimum payment, check your monthly statement for the exact amount due.
This may be through your card issuer’s website or mobile app, or by calling customer service.
Paying by the due date can help avoid late fees and protect your credit score. If you can afford to, consider paying more than the minimum.
Choosing how much to pay
When deciding how much of your credit card balance to pay, trying to pay more than the minimum amount each month may be helpful.
If you can pay more than the minimum amount, your balance will likely reduce, which can lead to less interest.
If you’re concerned about not being able to pay, take a look at our Money Worries page to see how we can help.
Over 5 million customers have already been accepted for a Vanquis Card
Frequently Asked Questions
How is my minimum payment calculated?
Your minimum payment may typically be calculated as a percentage of your outstanding balance, usually between 2% to 3% depending on the card provider (at Vanquis, the minimum payment is 1%), plus any interest and fees. Some issuers may set a flat minimum amount too and then charge whichever is the higher – the flat minimum or the percentage minimum.
What happens if I can’t afford the minimum monthly payment?
If you can’t afford the minimum monthly payment, you may incur late fees and interest charges, which can increase your overall debt. Your credit score could suffer due to missed payments. Consider contacting your credit card issuer, as they may offer hardship programmes or alternative solutions.
Can you pay less than the minimum payment on a credit card?
You must pay at least the minimum payment required on a credit card to avoid facing consequences. Paying below this amount may lead to late fees, increased interest rates, and negative impacts on your credit score. It’s useful to meet at least the minimum to maintain good standing.
Does making the minimum payment affect my credit score?
Making the minimum payment could help maintain your credit score by keeping your account in good standing and avoiding late fees. But consistently only paying the minimum amount may lead to higher credit utilisation ratios (the percentage of your total available credit that is being used). This could negatively impact your score over time. Paying more could potentially improve your overall credit health.
How can I make sure I meet my credit card payments?
To make sure you meet your credit card payments, set up automatic payments for at least the minimum amount. You should also keep track of due dates using reminders or calendar alerts. Creating a budget that prioritises credit card payments, and regularly monitoring your spending to stay within your limits may help you avoid surprises.