Minimum payments on credit cards are designed to be the lowest amount the lender will accept without considering the account in arrears. They are usually around 1% to 3% of the balance, or a fixed minimum of around £25, whichever is higher. For many people they feel affordable. But when income suddenly drops or another bill increases, even the minimum can start to feel impossible.
The most important thing to know is this: if you are struggling with minimum payments, contact your lender before you miss one. Not after. Before. The conversation is easier, your options are broader, and the consequences are significantly less serious.
What happens if you miss a payment
Missing a minimum payment triggers a late fee, usually around £12. It is also recorded on your credit file and can stay there for six years. If you miss several payments, the account may be passed to a collections team, interest continues to accrue, and you may eventually receive a default notice, which is a formal notification that the lender considers you in serious breach of the credit agreement. A default on your credit file affects your ability to access credit and some financial products for up to six years.
Ask your lender about a hardship arrangement
Most credit card providers have a financial hardship team or a dedicated process for customers who are struggling. If you contact them and explain your situation honestly, they may be able to offer a temporary reduced payment plan, a pause on interest, or a short payment holiday. These are not guaranteed, but they are available more often than people realise. Lenders generally prefer customers who engage early over those who disappear.
The Breathing Space scheme
If your debt situation is becoming unmanageable across multiple creditors, you may be eligible for the Breathing Space scheme (formally known as the Debt Respite Scheme). This gives you up to 60 days of legal protection from creditor action while you access professional debt advice. Interest and charges are paused during this period. To access it, you need to speak with a free, regulated debt adviser.
Free debt advice is available
If you are struggling with debt, you do not need to figure it out alone. StepChange, National Debtline, and Citizens Advice all offer free, independent advice and will not pressure you into any particular solution. These organisations can look at your full financial picture and explain all the options available, from informal arrangements with creditors to formal debt solutions. Getting advice does not commit you to anything.
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Ask Fin provides general guidance only, not regulated financial or debt advice. If you are struggling with debt, please contact a free regulated debt advice service such as StepChange or National Debtline.