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Using a credit card feels simple: spend today, pay later. The confusion usually begins when the monthly statement arrives, and you see multiple payment figures. One number, in particular, leads to frequent mistakes and higher costs over time: minimum amount due in credit card.
Many cardholders assume paying the minimum is sufficient to stay financially safe. While it does prevent late fees and negative credit reporting, it also allows interest to continue accumulating at high rates, turning short-term spending into prolonged repayment.
This guide explains what is minimum due in credit card, how it is calculated, why banks structure it this way, and what actually happens when you pay only the minimum. If you want to use credit cards without falling into high-interest cycles, this clarity matters.
Table of Contents:
- What is the Minimum Amount Due in a Credit Card?
- How Is the Minimum Amount Due Calculated?
- Minimum Amount Due vs Total Due vs Outstanding Balance
- Why Paying the Minimum Amount Due Is Important
- What Happens When You Pay Only the Minimum Amount Due?
- Pros & Cons of Paying the Minimum Amount Due
- When Should You Pay Only the Minimum Amount Due?
- Consequences of Not Paying Even the Minimum Amount Due
- Conclusion
What is the Minimum Amount Due in a Credit Card?
The minimum amount due in a credit card is the smallest payment your bank requires you to make by the due date to avoid a late payment fee and account default. It is not the full bill or the amount that stops interest from applying.
In most cases, the credit card minimum due is around 5% of your total outstanding balance, plus any compulsory components such as EMIs, fees, or unpaid past dues.
Example
| Credit Card Bill Component | Amount (₹) |
|---|---|
| Total outstanding balance | ₹10,000 |
| Minimum amount due (5%) | ₹500 |
If your statement shows a total due of ₹10,000, paying ₹500 keeps your account in good standing. However, the remaining ₹9,500 continues to attract interest from the next cycle.
The minimum due prevents penalties and default, but it does not stop interest or reduce your debt meaningfully.
How Is the Minimum Amount Due Calculated?
Banks use a structured formula to calculate the credit card minimum amount due, though the percentage can vary slightly (usually 5%–10% depending on issuer and card type).
General Calculation Formula:
Minimum Due = 5% of total outstanding + EMIs due in the month + Previous unpaid dues + Fees and charges (late fees, GST, etc.)
Example Breakdown
| Component | Amount (₹) |
|---|---|
| Current month purchases | ₹8,000 |
| Previous unpaid balance | ₹2,000 |
| EMI on a credit card | ₹1,000 |
| Fees/Charges | ₹200 |
| Total outstanding | ₹11,200 |
- 5% of ₹11,200 = ₹560
- EMI = ₹1,000
- Fees = ₹200
Minimum amount due = ₹1,760
Major issuers like HDFC Bank, SBI Card, and ICICI Bank follow this structure, with EMIs and past dues being non-negotiable additions to the minimum payable.
Always read your statement carefully. “Total Amount Due” and “Minimum Amount Due” are shown separately, usually near the payment due date.
Minimum Amount Due vs Total Due vs Outstanding Balance
Confusion between these three terms leads to poor payment decisions. Let’s clearly separate them.
1. Minimum Amount Due
- Lowest payable amount (typically 5% of outstanding or ₹250–500 min + fees).
- Prevents late fees (₹500–1,500) and credit score damage.
- Interest continues (24–42% p.a.) on the unpaid part.
2. Total Amount Due
- Entire statement balance.
- Paying this off avoids all interest.
- Best option financially.
3. Outstanding Balance
- Live balance, including post-statement spends.
- Changes daily.
- Relevant for interest calculations.
| Term | Meaning | Interest Impact | Example (₹) |
|---|---|---|---|
| Minimum Amount Due | Smallest payment to avoid a penalty | Interest continues | 500 on 10,000 |
| Total Amount Due | Full statement balance | No interest if paid in full | 10,000 |
| Outstanding Balance | Unpaid balance incl. past dues | Interest until cleared | 15,000 |
Key rule to remember:
- Pay total due → zero interest.
- Pay minimum due → no penalty, but interest continues.
- Miss minimum due → penalties + interest + credit score damage.
Want to understand what your unpaid balance actually represents? Learn more about the credit card outstanding amount and how it impacts your repayment and interest costs.
Why Paying the Minimum Amount Due Is Important
Despite its drawbacks, paying the minimum amount due in credit card still serves a critical purpose.
1. Prevents late payment charges
Late fees in India typically range from ₹100 to ₹1,300, depending on the outstanding slab.
Paying even ₹1 less than the minimum triggers these penalties.
2. Protects your credit score
If you miss the minimum due:
- The account is marked “past due.”
- CIBIL and other bureaus are notified
- Scores can drop 50–100 points for a single default
3. Keeps your card active
Non-payment can lead to:
- Spending blocks
- Temporary suspension
- Eventual card cancellation
4. Maintains banking relationships
Repeated defaults reduce:
- Credit limit enhancement chances
- Loan approvals
- Eligibility for premium cards
Paying the minimum is essential—but it should be the floor, not the goal.
What Happens When You Pay Only the Minimum Amount Due?
Paying only the credit card minimum amount due keeps penalties away, but it triggers long-term costs.
What changes after the minimum payment
- Interest starts accruing immediately on the unpaid balance.
- Interest-free period ends on new purchases.
- Rates are high: Typically 36%–48% per annum (3%–4% monthly).
- Compounding begins: Interest is charged on interest.
- Debt tenure stretches: Repayment can take years.
Month-wise Example
| Month | Payment | Balance After Payment | Interest | New Outstanding |
|---|---|---|---|---|
| 1 | 500 | 9,500 | 285 | 9,785 |
| 2 | 500 | 9,285 | 278 | 9,563 |
Even after two months of payments, the balance barely reduces.
Minimum payments slow down repayment dramatically and maximise interest costs.
Pros & Cons of Paying the Minimum Amount Due
Pros
- Avoids late fees and penalties
- Prevents credit score damage
- Useful during a temporary cash crunch
- Keeps card active
Cons
- High interest accumulation (36–42% annually)
- Loss of interest-free period
- Debt stretches over years
- Reduced future creditworthiness
Balanced view: The credit card minimum amount due is a safety net—not a payment strategy.
When Should You Pay Only the Minimum Amount Due?
There are limited, practical situations where paying only the minimum makes sense.
Appropriate Scenarios
- Temporary income disruption (job change, delayed salary).
- Emergency medical or family expense.
- Short-term liquidity gap of 1–2 months.
- To avoid credit score damage during cash stress.
Smarter Alternative
If you foresee difficulty clearing dues soon, convert the balance into EMIs.
- EMI interest: 15%–18% annually
- Revolving credit interest: 36%–48% annually
Practical advice:
EMIs cut interest costs by more than half compared to rolling over minimum payments.
Consequences of Not Paying Even the Minimum Amount Due
Missing the credit card minimum due leads to both immediate penalties and longer-term financial consequences.
Immediate Impact
- Late payment fee: ₹100–₹1,300, depending on the outstanding amount
- GST on penalty: 18% applied to late fees
- Higher default interest: Can go up to 3.75% per month in some cards
Credit Score Damage
- Payment delay is tracked as DPD (Days Past Due)
- DPD starts at 1–30 days internally and is reported to credit bureaus once it crosses 30 days
- Even a single reported delay can impact loan and card approvals for 12–18 months
Account Restrictions
- Temporary spending blocks on the card
- Cash withdrawal facility may be disabled
- Reward points can be forfeited in some card programmes
Long-Term Impact
- Lower eligibility for personal loans and home loans
- Higher interest rates on future borrowing
- Difficulty upgrading to higher-limit or premium credit cards
Not paying even the minimum amount due is significantly more damaging than paying only the minimum, both for cost and credit profile.
Not sure how your past payments have affected your profile? Check credit score for free and see where you currently stand.
Conclusion
The minimum amount due in credit card exists to keep accounts compliant - not debt-free. While it protects your credit record in tough months, relying on it regularly leads to expensive, long-lasting interest traps.
If you want credit cards to work for you, treat the minimum due as a backup option, not your default payment choice.
Want to explore credit cards that match your spending and repayment pattern? Discover the best credit cards in India on Finology Select with full details on fees, rewards, benefits, and eligibility.
FAQs on Minimum Due in Credit Card
1. What is the minimum due in a credit card statement?
It is the lowest amount you must pay by the due date to avoid late fees and credit score damage. It usually includes 5% of the outstanding plus interest and taxes.
2. Is paying the credit card minimum due enough?
It avoids penalties but does not stop interest. Interest continues on the unpaid balance until cleared.
3. How do banks calculate the credit card minimum amount due?
They typically charge 5% of the outstanding balance plus EMIs, previous dues, and applicable fees.
4. What happens if I don’t pay even the minimum due?
You face late fees, high interest, loss of interest-free period, and a significant credit score drop.
5. Can I convert my outstanding into EMIs instead of paying the minimum?
Yes. EMI conversion usually costs 15%–18% annually, far lower than revolving credit interest.
6. Does paying only the minimum due affect my credit score?
In the short term, it protects your score. Over time, repeated minimum payments may signal high credit dependence and impact scores negatively.
