Paying only the minimum on a £500 catalogue balance: the arithmetic
The figures below are illustrative, dated January 2025, and describe a calculation method rather than the pricing of any specific catalogue provider. The balance is £500, the representative APR (annual percentage rate, the yearly cost of borrowing expressed as a percentage) is 39.9%, which works out at a monthly interest rate of about 3.325%, and the minimum payment is held fixed at £25 a month throughout, so the arithmetic can be checked line by line.
- Month 1: interest of £16.63 is added to £500 (£500 × 3.325%), taking the balance to £516.63. The £25 payment is taken off, leaving £491.63 owing.
- Month 2: interest of £16.35 is added to £491.63, taking it to £507.97. £25 comes off, leaving £482.97.
- By month 12, twelve payments of £25 have been made — £300 in total — but the balance has only fallen to £378.92. £178.92 of the £300 paid has gone on interest.
- The same pattern repeats every month after that: interest is charged on what's left, then £25 comes off, and because the payment is small next to the balance, most of it keeps covering interest.
- The balance finally reaches zero in month 34 — 2 years 10 months after the purchase — when a final payment of £10.98 clears what's left.
- Total interest charged over those 34 months: £335.98. Total paid: £835.98, against an original purchase of £500.
Set against that, a fixed payment sized to clear the same £500 over 12 months works out at £51.22 a month.
| Minimum payment (£25/month) | Fixed payment over 12 months (£51.22/month) | |
|---|---|---|
| Months to clear | 34 | 12 |
| Total interest | £335.98 | £114.64 |
| Total paid | £835.98 | £614.64 |
The gap — £221.34 in extra interest, 22 extra months — comes entirely from the size of the monthly payment. This is general information about how minimum payments behave, not financial advice about any borrowing you have or are considering; for a decision about your own circumstances, see MoneyHelper at moneyhelper.org.uk, or check a firm's status on the FCA register at register.fca.org.uk. To work through your own balance and payment, use the catalogue account cost calculator.
See what your own balance and payment would actually cost
Enter your balance, APR and monthly payment and the calculator will show the total interest and how long it takes to clear. It works from the figures you enter, so it can only estimate, not predict what any specific lender will charge, and it is general information rather than financial advice. For a decision based on your own circumstances, see MoneyHelper or check the FCA register at register.fca.org.uk.