Minimum Repayments
Most credit card companies have a minimum monthly payment that you are required to pay on outstanding balances. This is usually either a percentage of the outstanding balance, typically between 2% and 5%, or a fixed amount, whichever is greater.
For example, if you have an outstanding balance of £100 and the minimum repayment is 2% or £5.00, whichever is greater, then your minimum repayment will be £5.00 (not 2% of £100 which is only £2.00 and therefore less than the minimum repayment). However, if your outstanding balance is £1,000 your minimum repayment would be £20.00 (that is 2% of £1,000).
The Banking Code requires that, each month, the minimum repayment you have to pay must be more than the amount of interest charged.
The Summary Box will tell you what the minimum repayment is, and your monthly statement will give exact details of the minimum repayment required each month. If you fail to make the minimum repayment then you are likely to incur a charge. Credit card companies share information on whether or not payments are made on time with the credit reference agencies. Continually failing to make the minimum repayment could damage your credit record.
