Minimum Payment

Minimum payment applies when you use your credit card and run up an outstanding balance. You have the option of making any payment towards the amount you have spent up to the full outstanding balance. You may alternatively opt to make the minimum payment that the credit card issuer will allow.

Typically most credit card issuers will stipulate a minimum payment of £5 or a small percentage say 3 or 5 of the outstanding balance on your credit card account.

Some card issuers stipulate an even lower minimum payment of just 2.25 or the total of charges interest insurance handling fees etc plus £5 whichever is lower.

Remember constantly making a minimum payment will ensure that it will take years to wipe out your credit card debt.

See cash card , charge card , credit card debit card and smart card.

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2009-02-17 00:00:00 © Moneyextra.com