The credit card minimum payment amount due also includes any EMI payment conversions you may have opted for. If you have an unpaid balance from the previous credit card billing cycle or exceed your credit limit, that amount is also added to the credit card minimum due.
How does the minimum due on a credit card work?
The credit card minimum due is the smallest payment a cardholder can make to meet their monthly obligation. It's usually a percentage of the total outstanding balance or a fixed amount set by the credit card issuer. Paying only the minimum due allows cardholders to avoid late fees, but it results in carrying forward the remaining balance to the next billing cycle, incurring high-interest rates.
How to calculate the minimum amount due on your credit card?
The minimum amount due is usually set at 5% of the total outstanding balance, which is calculated on the date the statement is generated by most credit card issuers. This is the amount that you are required to pay before or on the due date of the payment.
For instance, your credit card company generates a credit card statementon the 26th of every month and the due date is on the 5th of every month.
So, if you have made purchases worth Rs. 10,000 before the 26th, your minimum amount due will be 5% of the total payable amount (Rs. 10,000) i.e., Rs. 500. You have to pay this amount on or before the 5th of the next month to avoid late fees.
If you pay the minimum due of Rs. 500, you will not be charged any late fee. However, the remaining outstanding amount of Rs. 9,500 will continue to attract interest at 3.99% per month.
Date of transaction | Amount (Rs.) | Comments |
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July 20 | 5,000 | No interest or late fee is applicable. |
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July 25 | 5,000 | No interest or late fee is applicable. |
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July 26 | 10,000 | Your credit card statement is generated for Rs. 10,000. The minimum amount due is Rs. 500. |
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August 5 | 500 | The minimum amount due is paid. The outstanding amount of Rs. 9,500 will incur interest at 3.99%. |
Benefits of paying the minimum due amount
- Helps you avoid a penalty and a late payment fee
- Helps you keep your credit card account active
- Lets you keep your credit score unaffected
- If you are in a financial crisis, you can use the card and manage your finances
Risk of paying only the minimum due amount
Credit cards apply interest on your outstanding balance every month. So if you pay only the minimum amount, your outstanding balance will remain high. The interest on the outstanding balance will accumulate month on month, making your debts higher. If you have the funds, it is better to clear thecredit card bill payment in full every month.
Conclusion
In summary, while paying the minimum amount due can help you avoid late fees and penalties, it is not advisable to do so unless you have no other option. Instead, it is better to pay the total amount due or as much as you can afford to avoid accumulating excessive interest charges and harming your credit score.
FAQs
500. You have to pay this amount on or before the 5th of the next month to avoid late fees. If you pay the minimum due of Rs. 500, you will not be charged any late fee.
What is the minimum amount due in credit card payment? ›
The minimum amount due is typically a fraction of the total outstanding Credit Card bill payment amount, usually ranging from 5% to 10% of the total amount due.
What is the minimum amount to use Bajaj EMI card? ›
The minimum amount that you need to shop to avail Bajaj Finserv No cost EMI is Rs. 4,500. You can either purchase any product greater than Rs. 4,500 or shop for multiple products for a min value of Rs.
What is minimum credit limit on credit card? ›
It's not uncommon for different credit cards to have varying minimum and maximum credit limits. The minimum credit limit is often between $1,000 and $2,000, while some cards have a maximum of up to $100,000. However, not every credit card has a maximum.
How much is the minimum balance on a credit card? ›
Minimum payments are calculated differently bank by bank. Typically, your minimum payment is the greater of a certain percentage of your balance (1% or 2%) or a flat minimum payment (such as $25 or $35).
What is the minimum payment on a $500 credit card? ›
For example, if your outstanding balance is $500 and the minimum payment percentage is 2%, your minimum payment would be $10.
What is the minimum payment on a $3,000 credit card? ›
The minimum payment on a $3,000 credit card balance is at least $30, plus any fees, interest, and past-due amounts, if applicable. If you were late making a payment for the previous billing period, the credit card company may also add a late fee on top of your standard minimum payment.
What is the credit limit of Bajaj Finserv? ›
What is the limit on Bajaj Finserv Insta EMI Card? The Bajaj Finserv Insta EMI Card comes with a pre-approved credit limit of Rs. 3 lakh, which is the maximum amount you can spend using the card. This credit limit is determined based on factors like your CIBIL score and if you have a regular source of income.
How to pay Bajaj Finserv EMI card annual fee? ›
To pay the Bajaj Finserv EMI card fees, login to your customer portal on their website or app. Choose the 'Payments' section and follow the instructions to settle your EMI card fees conveniently. What is the Bajaj Finserv EMI Network Card annual charge?
What is the charge of Bajaj EMI card? ›
Fees of the Bajaj Finserv Insta EMI Card
| Types of Fees | Charges |
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| Online Convenience Fee | ₹69 (Inclusive of applicable taxes) - For customers who get the EMI Card exclusively through digital mode |
| Loan Limit Enhancement Fee | ₹117 (including taxes) |
| Add-on Card Fee | ₹199 (including taxes) |
2 more rowsA minimum payment is the lowest amount you're allowed to pay towards your credit card debt in any given month. This is calculated based on your latest statement balance. If you can, always try to pay more than the minimum amount.
Is a $500 credit limit good? ›
A $500 credit limit is good if you have fair, limited or bad credit, as cards in those categories have low minimum limits. The average credit card limit overall is around $13,000, but you typically need above-average credit, a high income and little to no existing debt to get a limit that high.
Is $300 a good credit limit? ›
A $300 credit limit is good if you have limited or bad credit. Credit cards for newcomers and people rebuilding their credit often have credit limits starting at $200, so a limit close to that amount is to be expected.
What is the minimum due amount of a credit card? ›
The credit card minimum amount due is the amount that a cardholder is required to pay on or before the payment due date. Typically, the minimum amount due is calculated as 5% of the total outstanding amount. The credit card minimum payment amount due also includes any EMI payment conversions you may have opted for.
What is the minimum payment due? ›
A credit card minimum payment is the lowest amount you can pay every month while keeping your account in good standing. Making at least the minimum payment on your credit cards every billing cycle ensures that you do not get stuck with late fees, penalty APRs or derogatory marks on your credit report.
What is the minimum payment on a 10000 credit card balance? ›
So, chances are you can speed up the payoff process significantly by making fixed payments. In the example above, if your credit card company calculates payments as 1% of your balance plus interest, your minimum payment on $10,000 in credit card debt would be about $300.
What happens if you only pay the minimum amount due? ›
Paying only the Minimum Amount Due will increase the Finance Charges billed and the time that it takes to pay your balance. Cardholders are required to pay at least the Minimum Amount Due on or before the payment due date to avoid late payment fees.
What is normally the minimum payment on a credit card? ›
Credit card issuers typically require you to pay a certain percentage of your statement balance as the minimum payment, often around 2-3% of the statement balance or a specific minimum amount, whichever is greater. Failing to meet this minimum payment can result in late fees and negatively impact your credit score.
Will minimum due payment affect credit score? ›
Paying minimum due affects credit score and can lead to higher interest charges over time. The remaining balance accumulates interest, increasing the total repayment amount significantly.
What is the minimum payment due on a credit card statement? ›
The minimum payment amount will appear on your monthly credit card statement in the box marked "Minimum Payment". It will normally be $10 plus the Interest and the Fees, as shown on the Calculating Your Balance section of your statement.
