How Credit-Card Interest Really Builds

Understand APR, fixed payments and why minimum payments can keep balances alive for years.

Credit-card APR is an annual rate, but interest is often applied using a daily or monthly calculation. The important practical point is that interest is charged against the remaining balance.

Why fixed payments matter

A fixed payment usually repays debt faster than a minimum payment that falls as the balance falls.

Stop adding to the balance

A payoff plan cannot work if new spending replaces every pound repaid. Separate the card from everyday spending where possible.

Compare transfer costs carefully

A lower promotional rate may help, but include transfer fees and the rate that applies after the offer ends.

Put it into practice

Use the connected calculator, save the result to your dashboard and review the figure during your next monthly check-in.