How much interest will I pay on my credit card?
It depends on your balance, your card's interest rate, and how long you carry that balance. The longer it takes to pay off, the more interest builds up overall.
When do you pay interest on a credit card?
Interest kicks in when you carry a balance from one month to the next. If you pay your balance in full each month, you won't pay any interest at all.
If you're in a promotional period, you may be paying reduced interest or none at all — but it's worth knowing when that ends.
Cash withdrawals and certain other transactions are treated differently and usually start building interest from the day of the transaction.
How to pay less interest on your credit card
The most effective way to pay less interest is to clear your balance in full each month. If that's not possible right now, these options can help:
Make more than the minimum payment. Even small additional payments can reduce your balance faster, which in turn lowers your interest costs.
Transfer your balance to a card with a lower interest rate. Many cards offer introductory 0% APR on balance transfers for a limited time, which can help you save on interest while you clear your balance.
Consider debt consolidation. If you have multiple debts, you can combine them into a single loan, usually with a lower interest rate. This may simplify your payments and reduce monthly outgoings. However, you may pay more in interest overall.
Your credit. Made simple.
Representative example
- Representative
- 39.9%APR(variable)
- Purchase rate
- 39.94%APR(variable)
- Assumed Credit Limit
- £1,200
- All credit histories considered
- You could get 0% for 6 months on balance transfers and purchases*
- No hidden fees, ever
39.9% APR Representative (variable)
*Balance transfers subject to a 2.9% fee.
Let's make it a yes
Need help with debt?
If you're struggling with debt, talk to your lender as soon as you can — they may be able to help. For free, impartial advice, you can also get in touch with:
 Citizens Advice |
MoneyHelper |
| National Debtline |
StepChange |
| MoneyWellness |
|
If you're struggling with debt, talk to your lender as soon as you can — they may be able to help. For free, impartial advice, you can also get in touch with:
| Citizens Advice |
MoneyHelper |
| National Debtline |
StepChange |
| MoneyWellness |
|
Got questions?
What is APR?
APR stands for Annual Percentage Rate. It's the interest rate you'll pay yearly if you borrow money using a credit card, loan, or mortgage. APR includes both the interest and any extra fees, giving you a clear picture of the total cost of your borrowing. For credit cards, the APR tells you how much interest you’ll owe if you don’t pay your balance in full each month.
Can you avoid paying interest on a credit card?
Yes, you can often avoid paying interest on your credit card by doing the following:
- Paying the balance in full each month by the due date.
- Using the grace period (if there is one). This is the time between the end of your billing cycle and your payment due date. Paying within the grace period avoids interest on new purchases. The grace period is only applicable if the previous month’s balance was paid in full. If not, the grace period on new purchases is forfeited, and interest accrues immediately on new transactions.
- Not withdrawing cash as these usually accrue interest immediately.
How do credit card interest rates work?
Your credit card interest rate is shown as an APR (Annual Percentage Rate) — this is the yearly cost of borrowing on your card. The higher your APR, the more interest you'll pay on any balance you carry.
Interest is applied to your balance daily. Your APR is divided by 365 to give a daily rate, which is then charged on whatever you owe at the end of each day.
For example: with a 39% APR, your daily rate is roughly 0.1%. On a £100 balance that's about 10p a day — around £3 over a month. That interest is then added to your balance, so the total grows over time if you're not paying it down.
What is a minimum payment?
The minimum payment is the lowest amount you must pay on your credit card bill each month.
It's usually a small part of what you owe, often 1-3%, or a set amount, whichever is higher.
Paying the minimum helps you avoid late fees and protects your credit score, but you'll still have to pay interest on the remaining balance. Paying only the minimum payment means it takes longer and costs more to pay off your debt.
To save money and get out of debt faster, try to pay more than the minimum whenever you can.
Can you freeze credit card interest?
You can’t usually freeze credit card interest, but there are ways to reduce or temporarily stop paying interest:
1. 0% APR offers: Some credit cards offer a 0% interest rate for a set period on new purchases or balance transfers. This can help you avoid interest for a few months, usually between 6 and 18 months.
2. Balance transfers: Move your balance to a credit card with a lower interest rate or a 0% introductory rate to save interest.
3. Contact your card provider. You should let them know as soon as you find yourself in financial difficulties. Often, card providers want to help and can discuss your options with you.
4. Debt Management Plans. You can get help from a credit counselling agency to set up a debt management plan. They can negotiate lower interest rates with your creditors.
Last updated
Reviewed by: Matt Waller
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