Why you should pay more than the minimum credit card payment
Credit cards provide a quick, easy and convenient way of paying for things. Not only do they enable you to spend money in advance and spread out the cost - they also provide protection against emergency costs that could otherwise be unaffordable.
Another advantage of credit cards is that they`re relatively flexible - you`re only required to make a minimum repayment each month, but apart from that you can repay as much as you want, when you want.
It can be reassuring to know you only have a minimum repayment to make - in a financial emergency, it can be helpful to reduce your repayments temporarily.
However, you should always try to repay a good proportion of your debt each month, because making only the minimum repayments could mean your debt takes a very long time to pay off - and costs a lot more in interest than you`d expected.
A typical example
Let`s say you have a £1,000 credit card debt with an interest rate of 18%. The credit card has a minimum repayment of 3% or £5 a month (whichever is higher).
Paying this back in equal payments over the course of a year would cost you £92 a month, paying back £1,093 in total.
On the other hand, making only the minimum monthly payment could cost you around £1,900 overall and take you a total of 166 months to repay - which means almost 14 years spent repaying the debt.
Making the minimum payment may be easy, but the longer you take to repay what you owe, the more interest you`ll pay and the longer you`ll be at risk of financial problems if anything goes wrong. It`s better to repay your credit card balance more quickly whenever you can.
What if I can`t afford to repay my debts more quickly?
If you simply can`t afford to make more than the minimum monthly payments on your credit card debt, it`s likely that you have a financial problem, and it`s important that you discuss your situation with an expert as soon as you can.
Review our latest credit card best-buys
Product | Transfer rate & period |
New Purchases rate & period |
Representative APR |
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Barclaycard Platinum Credit Card with Extended Balance Transfer |
0% 26 mths 3.5% Fee |
0% 6 mths |
18.9% (variable) |
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Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.9% (variable), transfer fees of 3.5% and a credit limit of £1200. | |||||
Barclaycard Platinum Credit Card with Balance Transfer |
0% 25 mths 2.8% Fee |
0% 6 mths |
18.9% (variable) |
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Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.9% (variable), transfer fees of 2.8% and a credit limit of £1200. | |||||
Tesco Bank Clubcard Credit Card for balance transfers |
0% 25 mths 2.9% Fee |
0% 3 mths |
16.9% (variable) |
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Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.9% and a credit limit of £1200. | |||||
Halifax Balance Transfer Credit Card |
0% 25 mths 3% Fee |
0% 3 mths |
18.9% (variable) |
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Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.95% (variable), transfer fees of 3% and a credit limit of £1200. | |||||
NatWest Platinum |
0% 24 mths 2.9% Fee |
0% 6 mths |
17.9% (variable) |
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Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 2.9% and a credit limit of £1200. | |||||
Royal Bank of Scotland Platinum |
0% 24 mths 2.9% Fee |
0% 6 mths |
17.9% (variable) |
||
Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 2.9% and a credit limit of £1200. | |||||
MBNA Platinum Credit Card |
0% 23 mths 2.5% Fee |
0% 3 mths |
16.9% (variable) |
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Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.5% and a credit limit of £1200. | |||||
Fluid Balance Transfer Card |
0% 23 mths 2.89% Fee |
0% 3 mths |
16.9% (variable) |
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Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.89% and a credit limit of £1200. | |||||
MBNA Credit Card |
0% 22 mths 2% Fee |
0% 3 mths |
16.9% (variable) |
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Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2% and a credit limit of £1200. | |||||
Lloyds TSB Platinum MasterCard |
0% 21 mths 1.5% Fee |
0% 3 mths |
17.9% (variable) |
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Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 1.5% and a credit limit of £1200. | |||||
Nationwide Building Society Credit Card |
0% 20 mths 1.55% Fee |
0% 3 mths |
15.9% (variable) |
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Representative example: With this credit card the representative APR is 15.9% (variable) based on an interest rate of 15.9% (variable), transfer fees of 1.55% and a credit limit of £1200. | |||||
We provide a representative range of products on competitive terms and do not act exclusively for any credit provider. Credit limits may vary depending on your circumstances. |
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