How much of my minimum monthly payment covers my balance?
Your minimum monthly credit card payment includes:
- An amount for interest and charges
- An amount to reduce what you owe
A persistent credit card debt takes a long time to reduce because your monthly payment goes mainly towards your interest. Only a small portion of the payment goes towards the balance.
Increasing your monthly payment means you’ll pay more off what you owe, so you’ll clear the balance quicker.
How long will it take to pay off my credit card debt?
The UK Finance minimum payment calculator can tell you how long it would take you to pay off your debt balance by only paying the minimum amount (note:calculator is not optimised for mobile phones).
It can also tell you how quickly you could pay the debt off by increasing your monthly payment.
For example, let's say you owe £2796 on a credit card that you no longer use. Depending on how much you can pay on top of the monthly minimum payment, there'll be a drastic reduction in what you pay in total over time.
(Note: these figures are based on estimates and will vary depending on your interest rate.)