What happens if you only pay the minimum on a credit card

How the minimum payment is worked out

Under the FCA’s rules, a credit card or store card provider must set the minimum payment at no less than the interest, fees and charges added to your account, plus 1% of the amount outstanding. This applies to agreements made on or after 1 April 2011.

StepChange explains that the minimum is often a percentage of what you owe, commonly between 1% and 3%. For example, if you owe £1,000 and your minimum is 3%, you are asked to pay at least £30 a month. Your statement shows your own minimum and the date it is due.

Why paying only the minimum keeps you in debt for longer

Because the minimum is built from that month’s interest and charges plus a small slice of the balance, much of each payment goes on the cost of borrowing. Only a small part reduces what you actually borrowed. As the balance falls, the minimum usually falls too, so the debt can take years to clear.

The FCA’s rules require providers to tell people in this position that paying more would reduce the cost of borrowing and the time it takes to repay. If you keep spending on the card at the same time, the balance may hardly move at all.

What persistent debt means

Persistent debt is when, over the previous 18 months, you have paid more in interest, fees and charges than you have paid off the money you borrowed. The FCA’s rules apply to credit cards and store cards, and providers must check for it at least once a month.

The rule does not apply if your balance was below £200 at any point in those 18 months. StepChange says being contacted about persistent debt does not mean you have done anything wrong.

What your provider must do after 18 months

If you are in persistent debt, your provider must contact you in plain language. Under the FCA’s rules, it must:

• tell you that, over the last 18 months, you paid more in interest, fees and charges than off the balance
• explain that paying more would reduce the cost and the time it takes to repay
• encourage you to get in touch to talk about your finances and whether you can pay more without harming your situation
• warn you what could happen if the pattern carries on for another 18 months, such as your card being suspended
• give you contact details for not-for-profit debt advice and encourage you to contact one of them

What happens if it carries on for another 18 months

If you are still paying more in interest and charges than off the balance over the next 18 months, your provider must take reasonable steps to help you repay faster, in a way that does not harm your finances. It must set out options and ask you to reply within a set time.

The FCA gives examples of options, such as paying more each month under a repayment plan or moving the balance to a fixed personal loan. The FCA expects the aim to be repaying the balance in a reasonable period, usually three to four years.

If you cannot afford to pay more

Tell your provider. If you say the options are not sustainable, the FCA’s rules say the provider must treat you with forbearance and due consideration. FCA guidance says this may include reducing, waiving or cancelling interest, fees or charges, so that you can clear the balance in a reasonable period.

The provider will generally suspend or cancel use of the card while you repay. The FCA says this should not happen where it would seriously harm your finances, for example if you depend on the card for essentials such as rent, council tax, food or utility bills.

If you are struggling to pay the minimum

StepChange suggests you keep making at least the minimum payment on time while you sort out a budget, because late or missed payments are recorded and can lead to a default. If you cannot manage even the minimum, contact your provider before you miss a payment. The FCA’s rules require providers to act on signs of financial difficulty, not only after you fall behind.

Free, confidential debt advice can help you work out what you can afford and talk to your providers for you. You do not have to pay for this help.

Common questions

Will paying only the minimum hurt my credit record?

Paying at least the minimum on time keeps your account up to date. StepChange notes that late or missed payments are what get recorded against you. Paying only the minimum does mean you pay more interest over time.

Can my provider raise my credit limit while I only pay the minimum?

Under the FCA’s rules, a provider must not increase or offer to increase your limit if you are at risk of financial difficulties, or if you have told it you do not want increases. You can also reduce your limit or refuse increases at any time.

Does the persistent debt rule apply to store cards?

Yes. The FCA’s persistent debt rules cover credit cards and retail revolving credit, which includes store cards. They do not cover business credit cards.

Will my card be stopped if I am in persistent debt?

Not at the 18-month stage. If the pattern continues for a further 18 months and you do not reply to your provider’s request, it must suspend or cancel your use of the card.

Sources

Every fact in this page was checked against these official sources on 1 November 2026.

1. CONC 6.7: Post contract: business practices Financial Conduct Authority Handbook
2. Credit card debt StepChange Debt Charity

Written and fact-checked by the PiggyBank editorial team. Last reviewed 1 November 2026. This guide is general information, not financial advice. How we write and check our guides.