Minimum payments

photo36

Hi, is it law that the minimum payment on credit cards should be the interest plus 1% of the out standing balance or just a guideline? I owe £5,500 on a Tesco credit card but the minimum payment is normally about £113 a month with approx £85 in interest added on so my payment doesn't dent the balance. I do make additional payments and hope to clear the balance in about 18 months it just annoys me that when I get the bill if I were to only make the minimum payment it wouldn't make hardly any difference to the debt.:j

[Deleted User]

On all new accounts, yes. On accounts pre Jan 2011, you could still have a different min payment formula.

sistafromanothermista

My barclaycard was taken out last nov and is 2.5% of outstanding balance.......

smithers1981

Is it not possible for you to apply for a balance transfer? £85 a month interest is a good incentive.

Tixy

sistafromanothermista wrote: »

My barclaycard was taken out last nov and is 2.5% of outstanding balance.......

It has to be at least 1% of the balance plus interest. Nothing to stop lenders choosing a higher %.

At a guess your APR is 18% or less - and if so it meets the criteria.

sistafromanothermista

Tixy wrote: »

It has to be at least 1% of the balance plus interest. Nothing to stop lenders choosing a higher %.

At a guess your APR is 18% or less - and if so it meets the criteria.

:wave: it's 0% and was a BT, 2.5% minimum but overpay by at least £60 at the mo. Snowballing the others cards first as their 0% ends sooner

sistafromanothermista

photo36 wrote: »

Hi, is it law that the minimum payment on credit cards should be the interest plus 1% of the out standing balance or just a guideline? I owe £5,500 on a Tesco credit card but the minimum payment is normally about £113 a month with approx £85 in interest added on so my payment doesn't dent the balance. I do make additional payments and hope to clear the balance in about 18 months it just annoys me that when I get the bill if I were to only make the minimum payment it wouldn't make hardly any difference to the debt.:j

:wave: Hi Photo, there is a section on this forum that shows you how long it would take to pay a card off if you were just to pay the min i did it and was :eek::eek: soon spurred me to pay anything extra each month i can tell you
Good luck on the journey and to becoming debt free in the future you are not alone!!!