Credit Card Minimum Repayments: The Real Cost

By the Aussie Credit Guide editorial team · Reviewed 5 October 2026

The minimum repayment keeps the account in good standing, and that is about all it does. Because it shrinks as the balance shrinks, paying only the minimum can stretch a modest debt over many years.

How the minimum is set

Each provider sets its own formula. It is commonly a small percentage of the closing balance, often 2% to 3%, or a fixed dollar amount, whichever is greater. Any overdue or over-limit amount is usually added on top.

Why it takes so long

Most of a minimum repayment goes to interest. And because the minimum is a percentage of the balance, it falls each month as the debt falls, which slows progress further.

In the illustration above, $3,000 at 19.99% p.a. takes 28 years and 10 months to clear on minimum repayments and costs about $9,385 in interest. Paying a fixed $150 a month clears it in 2 years and 1 month for about $679.

The warning on your statement

Credit card statements in Australia carry a minimum repayment warning. It shows how long the balance would take to clear on minimum repayments and what it would cost, compared with a repayment that clears it in about two years. It is worth reading each month, as the figures use your actual balance and rate.

What happens if you miss the minimum

• A late payment fee is usually charged.
• Any promotional rate may be withdrawn, depending on the card’s terms.
• A payment more than 14 days late can be recorded in the repayment history on your credit report.
• An amount of $150 or more that is 60 days or more overdue can be listed as a default, after the provider has given written notice.

If the minimum is hard to meet

Providers must consider a request for hardship assistance. See financial hardship, or call the National Debt Helpline on 1800 007 007 for free financial counselling.

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