Credit card query

[helpmelosemybigbelly]

So DH has a credit card which he’s maxed out so luckily can’t use it any more. At the moment he’s only able to pay the minimum payment each month which I know is the interest.. however, my question is, as he’s not using the card. And he’s only paying the interest, will the balance eventually go down?

No. Not if he's only paying the interest. Depending on the amount of debt on the card I'd recommend he speak to stepchange or another debt advice charity/services as they can negotiate an affordable repayment however it depends on the amount of debt he has accrued.

I think The minimum amount usually includes interest plus some balance, but not much. He will have statements that show and explain this. Really needs to pay even £20 more to reduce the balance a bit. Ideally pay more!

has he cut the card up? Does he need to considering he pushed it to the limit?

Card is cut up yet.. today he managed to pay an extra £20 so hopefully he can do that most weeks (he gets paid weekly). I just thought surely the interest will be paid off at some point and then the minimum payment will go towards the balance

The minimum amount is the interest plus some balance so it will eventually go down but it could take decades. Many banks have a credit card repayment calculator it would be worthwhile looking at one so you can see the figures.

and then trying to up the amount even if it is just an additional £5 per month it can make a massive difference

as the balance reduces the amount towards interest reduces and more balance is paid off. This is why it’s good to pay off as much as you can each month as you will pay off the balance quicker.

interest is charged for any balance left.

Interest is added monthly to the credit card balance if it’s not cleared in full, so if all you do is pay the interest every month the balance won’t go down and there will never be a point where the interest is paid off. But the minimum payment often is an amount slightly higher than than the interest to ensure that eventually the balance is cleared.

No, interest is charged because he has debt on the card. It's the monthly fee for the debt.

Divide the balance by 20 and that will tell you the ampunt of weeks it will take to clear the debt in full.

For example if he continues paying the interest monthly plus £20 a week and the balance is £3000 it will take just under 3 years to clear it in full.

The interst will start reducing as he paids it down so it he doesn't reduce the amount he pays in total, it eill take slightly less time.

If he is able to get a 0% or low rate card then he can do a transfer to that and pay it off quicker. Worth doing a check on MoneySavingExpert or similar comparison site.

No, interest will continue to increase the amount owed each month. Minimum payments only servce the debt not pay off the balance spent.

I got in a mess years ago and only being able to pay the minimum amount, it was a nightmare

ring the credit card company and they will freeze the current balance and give you options, don’t just keep paying the minimum amount

for me the best option was taking a loan out and paying the balance off that way

do speak to the card company asap, they will help

Is that right? Can the balance increase if you aren't spending anymore, I thought the minimum balance was set to always paid off some of the capital of the debt

Have a search on the money section on here as there's some good advice around credit card balances. Paying the minimum each month is the longest and most expensive way to tackle the debt. Try and use a fixed amount each month.

E.g. if minimum payment next month is £70, try and pay £80 that month and each month thereafter.

I got in a tangle fifteen or so years ago. Not maxed out but moved some significant balances to interest free offers.

Unfortunately I only paid the minimum and didn't move the balances to the next interest free offer that came along.

The balances after the monthly payment hardly shifted at all over a couple of years.

It will go down very very slowly, because as the balance reduces, so does the minimum payment. Left to its own devices it can take over 20 years to be paid off.

However, the 'persistent debt' rules should kick in before then, so it shouldn't get that bad these days.

But he can pay it off much faster if he can transfer it to a 0% deal. Also to pay as much as he can above the minimum. Even if he keeps ot at the same level as now, it goes down much faster than just the reducing minimum, but even a few quid extra here and there can make a difference.