Credit Card Minimum Payments Explained - Every Bank's Rule, and What Paying the Minimum Really Costs
Every credit card statement shows the balance due and a 'minimum payment due':
- Pay the balance in full and you pay no interest.
- Pay the minimum and you pay interest on everything else - and because the minimum is set only just above the monthly interest charge, the balance barely moves.
- This guide sets out every issuer's minimum payment rule, shows what paying the minimum costs at typical rates, and includes a calculator so you can see your own numbers.
Updated 31 August 2026
Important: This guide was relaunched in August 2026. Every minimum payment rule and interest rate was checked against each issuer's published terms. Issuers can change these at any time, so confirm your card's terms before you rely on them. Report an error on this page - no name or email needed.
In this guide, we present every bank's minimum payment terms, what to watch out for and ways to avoid sky-high credit card interest costs.
Know This: Three things the table below shows:
In this guide, we present every bank's minimum payment terms, what to watch out for and ways to avoid sky-high credit card interest costs.
Know This: Three things the table below shows:
- First, the dollar floor matters as much as the percentage: at 12.90%, Westpac's 2% or $5 rule takes 14 years longer to clear than BNZ's 2% or $25, because a $5 floor lets the payment shrink to almost nothing.
- Second, on a rewards card a 2% minimum is a life sentence - more than a century - and on a store card it never clears at all, because 2% of the balance is less than a month's interest.
- Third, a fixed $200 a month clears the same $5,000 in about three years on any card, and $400 a month in about 15 months. The minimum is the bank's number; pick your own.
Minimum payment rules by issuer
| Minimum payment (the greater of) | Issuers using it | First payment | At 12.90% (low rate card) | At 22.95% (rewards card) | At 28.95% (store card) |
|---|---|---|---|---|---|
| 5% or $10 | Kiwibank, SBS Bank, TSB | $250 | 8 years 6 months $1,323 interest | 10 years 5 months $2,938 interest | 12 years 1 month $4,352 interest |
| 3% or $10 | American Express, ANZ, ASB, Co-operative Bank, Q Mastercard | $150 | 14 years 11 months $2,645 interest | 24 years 1 month $7,997 interest | 39 years 10 months $17,410 interest |
| 3% or $20 | Gem Visa | $150 | 12 years $2,543 interest | 19 years 1 month $7,643 interest | 31 years 1 month $16,540 interest |
| 2% or $25 | BNZ | $100 | 18 years 2 months $4,812 interest | 105 years $59,839 interest | Never - the minimum is less than the monthly interest |
| 2% or $5 | Westpac | $100 | 32 years 4 months $5,505 interest | 212 years $72,803 interest | Never - the minimum is less than the monthly interest |
| Pay $200 a month instead | Any card | $200 | 2 years 6 months $855 interest | 2 years 11 months $1,866 interest | 3 years 3 months $2,754 interest |
| Pay $400 a month instead | Any card | $400 | 1 year 2 months $399 interest | 1 year 3 months $769 interest | 1 year 4 months $1,023 interest |
Notes:
MoneyHub Founder Christopher Walsh explains minimum payments in the video below:
- Minimum payment rules checked against each issuer's published terms, August 2026; rules can differ between cards from the same issuer.
- The three rate columns are illustrations, not the rates any listed issuer charges. Each row applies that issuer's minimum payment rule to three example rates - 12.90% (some of the cheapest bank cards, although lower rates exist), 22.95% (a typical rewards card) and 28.95% (store-card territory) - to show how the rule behaves over time. Your card's actual rate is on your statement; enter it in the calculator below for your own figures.
- Figures assume the minimum is recalculated each month on the closing balance, with no new spending and no fees.
- TSB's minimum payment rule isn't published on its website; the 5% or $10 in the table is from TSB's previous conditions of use. If you hold a TSB card, the rule is on your statement.
MoneyHub Founder Christopher Walsh explains minimum payments in the video below:
Credit Card Minimum Payment Calculator
Enter your balance, rate and your card's minimum payment rule to see how long paying the minimum takes and what it costs - and what a fixed monthly payment does instead.
If you only pay the minimum
24 years 1 month
to clear the balance
First minimum payment$150
Total interest$7,997
Total paid$12,997
If you pay $200 a month
2 years 11 months
to clear the balance
Total interest$1,866
Total paid$6,866
Interest saved$6,131
Paying $200 a month instead of the minimum clears the debt 21 years 2 months sooner and saves $6,131 in interest.
Assumes the minimum is recalculated each month on the closing balance (including that month's interest), no new spending and no fees. Indicative only - confirm your card's rule and rate with your issuer.
Five Must-Know Credit Card Minimum Payment Facts
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​Interest starts the day you don't pay in fullWhatever is unpaid on the due date is charged interest daily, and most cards then cancel the interest-free period on your purchases as well. The Reserve Bank puts the average rate on interest-bearing credit card balances at 19.6% - New Zealanders pay around $550 million a year in credit card interest.
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The percentage and the dollar floor both matterOn a $1,000 balance at 20% with a 2% minimum, month one's payment is $20; the interest on the remaining $980 is about $16, so the balance only falls to $996. On a 2% or $5 minimum that $1,000 takes more than 40 years to clear; on BNZ's 2% or $25 rule it takes 5 years 7 months. Same percentage, very different result.
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The minimum is set to keep you in debtBanks set it just above the monthly interest charge - on a 2% minimum at 22.95%, more than 90% of your first payments is interest. The examples above show the result: 8 to 32 years even at the cheapest rates, and decades longer - or never - on rewards and store cards.
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​$50 or $100 more a month changes everythingOn a $5,000 balance at 22.95% with a 3% minimum, paying a fixed $200 a month instead of the minimum clears the debt in 2 years 11 months rather than 24, and saves around $6,100 in interest. Every dollar above the minimum comes straight off the balance that next month's interest is calculated on.
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A balance transfer helps only with a planThe current offers are 0% for six months (ASB Visa Light, Co-operative Bank) or 1.99% for up to 24 months (ANZ Low Rate), after which the balance reverts to the card's standard rate of 12.90% to 13.90%. Set your payment at balance ÷ promo months before you apply, and don't spend on the new card. Our balance transfer guide compares the offers.
Our View: Only get a credit card if you can pay it off every month. If you need one to bridge bills, keep the limit as low as the bank will allow, and never let "minimum payment due" be the amount you pay. |
