Comparing UK 0% credit cards online since 2002What is a credit card minimum payment? How much is a typical minimum credit card payment in the UK, in 2024? How is the minimum payment calculated on a 0 credit card?
All of the questions above, are ones that we have seen many UK credit card customers looking for answers on, over recent months. Questions on this topic have also been increasing recently, due to the current cost of living crisis, as household bills rise for many people.
Minimum Credit Card Payment
What is the minimum credit card payment on a 0% credit card?
A credit card minimum payment is the smallest amount that you must make, as a payment to the card company, each and every month.
This payment only applies if you have an outstanding amount due on your card. No payment is required from you, if your card has a zero balance on your most recent monthly statement.
You do need to make at least the minimum payment on time, every month, if a payment is due. If you do not, then the credit card company may add a late payment fee onto your outstanding balance.
Minimum Payment On 0 Credit Card
How is the minimum payment calculated on a 0% credit card?
A customers minimum payment will vary depending on how much the customer has outstanding on their card. This amount will also vary depending on the minimum payment terms, set by the card company.
The law regarding credit card payments, was changed several years ago. Now, for all British credit card companies, the minimum monthly payments must be at least equal to any default charges and interest due on the customer’s statement, plus 1% of the remaining balance.
To better illustrate credit card minimum payments, consider the following example. Do bear in mind however, that the minimum payment terms do vary, from card to card.
- Mr Jones pays interest of 24.9% APR on his credit card and has an outstanding balance of £3000
- As a result, Mr Jones will have to make the following minimum payment :-
- Monthly interest due on the £3000 balance = £62.25
- 1% repayment of the £3000 balance = £30
- Total minimum payment = £92.25
This minimum payment amount will then reduce the next month and each month going forwards. This is because the outstanding balance due on the customer’s card reduces each month.
Minimum Card Payment – Be Aware
If you only make the minimum payment each month, then the time taken to clear the outstanding balance is much longer. As a result you will pay a much higher amount in interest charges.
Consider the example above, of an outstanding £3000 credit card balance. If you only make the minimum payments each month, then it would take 28 years and 5 month to clear this debt. It would also cost you £5,396 in interest, over the years. That is an awful lot of interest, and it will take a lot of years to clear your debt!
Making a fixed payment every month, £100 for example, instead of the minimum payment will greatly reduce the time taken to pay off your balance. This will also greatly reduce the amount paid in interest, if and when any monthly interest payments become due.
As a result, we would strongly recommend that you never just make the minimum payment, for month after month.
Minimum Payment On 0 Interest Credit Card
Transferring any outstanding balance to a new 0% interest credit card which has a 0% introductory balance transfer offer can save you money. This will reduce the time taken to pay off the balance, and also reduce the amount you have to pay in interest.
0% balance transfer cards charge no interest during the 0% promotional balance transfer period. As a result, all the payments you make, reduce your outstanding balance. So your level of debt does reduce faster, during the introductory offer period that you are paying no interest.
The following popular featured credit cards all offer 0% balance transfer deals:-
0% Credit Card Expert may receive commissions from some of the credit card companies that we refer users to. How this site works.
- 0% for up to 26 months on balance transfers made within 90 days of account opening
- 3.49% balance transfer fee, minimum £5
- 0% on purchases for 3 months from account opening
- Collect M&S points every time you shop anywhere in the world with your card
- One point for every £1 you spend in M&S and one point for every £5 you spend elsewhere
- Manage account online
- Annual Fee: None
- You are a UK resident
- You have an annual income or pension of at least £6,800
- You are aged 18 or over
- You have not held a credit card with M&S Bank within the previous 12 months
- 0% interest for up to 26 months on balance transfers made within first 60 days of account opening
- 3.49% balance transfer fee applies (minimum £5)
- 0% interest on purchases for 3 months from account opening
- At end of promotional period, balance transfers and purchases will revert to standard variable rate
- Worldwide offers and discounts with HSBC home&Away
- Manage your card online
- Annual Fee: None
- You have an annual income or pension before tax of £6,800 or more
- You are a UK resident
- You are aged 18 or over
- You do not hold an HSBC Basic bank account
- 0% for up to 12 months on balance transfers made within 90 days of account opening
- 3.49% balance transfer fee, minimum £5
- 0% on purchases for up to 20 months from account opening
- Collect M&S points every time you shop anywhere in the world with your card
- One point for every £1 you spend in M&S and one point for every £5 you spend elsewhere
- Manage account online
- Annual Fee: None
- You are a UK resident
- You have an annual income or pension of at least £6,800
- You are aged 18 or over
- You have not held a credit card with M&S Bank within the previous 12 months
- 0% interest on balance transfers for 20 months
- 3.24% or 4.24% balance transfer fee on transfers made within first 90 days (minimum £4)
- 0% interest on purchases for your first 3 months
- Collect up to 3 Nectar points per £2 in Sainsbury’s, Argos, and Habitat
- Collect 1 Nectar point for every £5 spent on your card elsewhere
- Online account management
- Annual Fee: None
- You have a permanent UK address
- You have not been declined for credit in the last month
- You do not have a history of bad credit
- You are aged 18 or over
- 0% interest for up to 16 months on balance transfers made within first 60 days of account opening
- 3.49% balance transfer fee applies (minimum £5)
- 0% interest on purchases for up to 18 months from account opening
- At end of promotional period, balance transfers and purchases will revert to standard variable rate
- Worldwide offers and discounts with HSBC home&Away
- Manage your card online
- Annual Fee: None
- You have an annual income or pension before tax of £6,800 or more
- You are a UK resident
- You are aged 18 or over
- You do not hold an HSBC Basic bank account
Typical Minimum Payment
The minimum payment on a 0% credit card does vary depending on which card company the payment is being made to. This is due to the British credit card companies having different terms and conditions for their cards and customers.
Here are some of the main minimum credit card payment terms:-
- Barclaycard minimum payment
- The greater of 2.25% of your balance, 1% of your balance plus interest and charges, or £5
- HSBC minimum payment
- The greater of 2.5% of your balance, or 1% of your balance plus interest and charges, or £5
- MBNA minimum payment
- The greater of 1% of your balance plus interest and charges, or £25
- Santander minimum payment
- The greater of 1% your balance plus interest and charges, or £5
- Tesco credit card minimum payment
- The greater of 2x the monthly interest and charges, or 1% of your balance plus interest and charges, or £25
Pleas note that these are typical payments. Some customers may have different payment terms to the terms that are shown above. In fact some card companies, Barclaycard for example, have been increasing the minimum monthly amounts for some, but not all, of their customers recently.
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