Borrowers paying the minimum on UK credit cards are still subject to FCA rules that route repayments to the most expensive balances first and cap minimums at a formula tied to interest, fees and at least 1% of the outstanding principal.
How repayments are ordered
Under CONC 6.7, firms must allocate payments to the debt carrying the highest annual percentage rate before applying cash to cheaper promotional balances. That ordering applies to standard retail cards and store cards, with carve-outs for business-only products promoted solely for corporate use.
The rule matters when customers hold a mixture of purchase APRs, balance-transfer deals and money-transfer promotions on one plastic wallet. Without the waterfall, issuers could leave expensive debt untouched while promotional balances shrink, extending the time borrowers pay double-digit rates.
Minimum payment mechanics
Separately, the handbook requires minimum payments to cover at least the interest, fees and charges applied in the period, plus one percentage point of the principal balance. Firms may offer flexible repayment amounts above that floor, but they cannot set a minimum that would leave principal untouched while interest compounds.
These requirements sit alongside the persistent-debt regime, which kicks in when a customer has paid more in interest and charges than principal over an 18-month window. At that point issuers must escalate contact, propose repayment plans and, in some cases, suspend the card if the borrower cannot sustain higher payments.
Reform on the horizon
Parliament is still debating wider Consumer Credit Act reform through the Financial Services and Markets Bill 2026. Legal briefings from City law firms note that automatic sanctions in the 1974 Act may be repealed in favour of FCA-led rules, while an amendment would force the Treasury to publish how the regulator plans to exercise new powers before they take effect.
For cardholders, the practical point is that today’s protections remain in the CONC sourcebook even as the legislative scaffolding shifts. Any change would need to be consulted and timetabled, which means the waterfall and minimum-payment maths are the baseline for this winter’s statements.
What to check on your statement
If you carry multiple rates, look for a breakdown showing how last month’s payment was applied. Interest-plus-1% minimums can still leave balances barely moving when APRs are high, which is why money charities continue to urge fixed payments above the floor.
Until primary legislation settles, the FCA’s existing toolkit—not a new statute—is what keeps issuers from silently rearranging repayment priorities.