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Minimum payment on a CC

(8 Posts)
Justwondering79 Fri 30-Sep-16 19:26:10

Hello - I saw on another thread about paying minimum payment + £5 on the day before due date and balance would be paid off in two years?

Could someone kindly explain this to me? My CC is my only debt (bar mortgage) and would like to cut it up and see it gone! £2.5k on it, minimum payment £27 and it's 0% - helped me survive maternity leave!

GeorgeHerbert Fri 30-Sep-16 19:33:25

Maths is not my strongest point - but if you pay £27 +£5 every month (£32) it would take you 79 payments to clear the debt assuming 0% interest. So That's 6.5 years not 2.
I don't think paying the day before due date has anything to do with how quickly you pay something off.
If you wanted the debt gone in 2 years you would need to pay £105 per month.

nannynick Fri 30-Sep-16 20:29:07

Have a look at the Credit Card spreadsheet that is linked on this thread.

I think it is about fixing the repayment amount at the amount that it is initially. £27 does not sound right. Would need to be over £100 to repay in 2 years assuming 0% for that entire 2 year period.

Justwondering79 Fri 30-Sep-16 21:31:18

That's why I thought but a comment on another thread said different?! Confused me!

kath6144 Sat 01-Oct-16 17:26:02

But surely how quickly it is paid off depends on how much is on it in the first place amd your own interest rate - I am guessing the other thread referred to a dfferent starting amount and possibly also a different interest rate

kath6144 Sat 01-Oct-16 17:27:26

oops, just saw that you on 0% rate, but same principal, maybe the other thread referred to a lower starting amount?

horizontilting Sat 01-Oct-16 18:21:19

I saw that thread too, OP, and have been wondering. It's explained a bit more on another thread I'll link to in a moment.

I think what's being said is that when you set up a standing order, rounded up, and your balance begins to drop a little, then since you're still paying a set amount (which is increasingly higher than your direct debit would be) more and more of that standing order is going to reduce your balance. So the payments kind of snowball?

horizontilting Sat 01-Oct-16 18:22:56

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