The minimum payment trap
Paying only the minimum on a £5,000 credit card balance at 24.9% APR takes about 20 years and costs about £9,242 in interest. Fixing the payment at the first month’s minimum clears it in under five years. Here is the full analysis.
Applies to: UK-wide
What to do now
- See your own figures in the payoff calculator.
- Fix your monthly payment instead of paying the falling minimum.
- If you cannot, ask the lender to freeze interest.
Results
| Balance | APR | Minimum only: time | Interest | First minimum | Fixed at first minimum: time | Interest | Saving |
|---|---|---|---|---|---|---|---|
| £1,000 | 24.9% | 6 yrs 4 mo | £942 | £30.75 | 4 yrs 7 mo | £682 | £260 |
| £1,000 | 29.9% | 7 yrs 1 mo | £1,262 | £34.92 | 4 yrs 3 mo | £774 | £488 |
| £1,000 | 34.9% | 7 yrs 9 mo | £1,597 | £39.08 | 4 years | £858 | £738 |
| £2,500 | 24.9% | 13 yrs 11 mo | £4,055 | £76.88 | 4 yrs 7 mo | £1,705 | £2,350 |
| £2,500 | 29.9% | 14 yrs 8 mo | £4,999 | £87.29 | 4 yrs 3 mo | £1,935 | £3,064 |
| £2,500 | 34.9% | 15 yrs 4 mo | £5,959 | £97.71 | 4 years | £2,146 | £3,813 |
| £5,000 | 24.9% | 19 yrs 8 mo | £9,242 | £153.75 | 4 yrs 7 mo | £3,410 | £5,833 |
| £5,000 | 29.9% | 20 yrs 5 mo | £11,228 | £174.58 | 4 yrs 3 mo | £3,870 | £7,358 |
| £5,000 | 34.9% | 21 yrs 1 mo | £13,230 | £195.42 | 4 years | £4,292 | £8,938 |
| £10,000 | 24.9% | 25 yrs 5 mo | £19,617 | £307.50 | 4 yrs 7 mo | £6,819 | £12,798 |
| £10,000 | 29.9% | 26 yrs 2 mo | £23,687 | £349.17 | 4 yrs 3 mo | £7,740 | £15,947 |
| £10,000 | 34.9% | 26 yrs 10 mo | £27,772 | £390.83 | 4 years | £8,585 | £19,187 |
Method
Interest is charged monthly at one-twelfth of the APR on the outstanding balance. The minimum payment each month is the interest for the month plus 1% of the balance, or £25 if that is more — a widely used UK formula. We assume no new spending, no fees and an unchanged rate. Individual cards use different formulas and rates, so treat the figures as illustrations. Rates of 24.9%, 29.9% and 34.9% span common representative APRs on UK credit cards.
Using this research
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More research: council tax and insolvency in 2026 — where debt bites hardest.
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Common questions
How long does it take to pay off £5,000 on minimum payments?
In our model, about 19 yrs 8 mo at 24.9% APR, with about £9,242 paid in interest.
Why do minimum payments take so long?
Because the minimum falls as the balance falls, most of each payment goes on interest and the balance shrinks very slowly.
What is the quickest fix?
Keep paying the same amount each month instead of the falling minimum. That alone can cut the time from decades to a few years.