All about  minimum payment on credit cards


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You might have elders suggesting that you should not borrow money to enjoy luxuries, should restrict your needs to your income levels. Today’s scenario is completely different, banks have come up with different loan products and tempting offers to encourage people to buy something even when they don’t have cash in hand.

As the lending institutions are giving you an option to repay the loan amount in monthly installments, this is considered the most feasible option by many people in the country.

Crashing the temptation of the loan products entered the credit cards into the market,  these credit cards offer interest-free credit for a short interval and have become the most desired option to transact in the market.

Credit card

As the name suggests, the user is provided with interest-free credit up to a certain limit till the due date. The credit card’s billing cycle is 50 days in most cases, and you are liable to pay the used amount without fail on the due date. Failing to do so, will attract penalty in the form of a high rate of interest rate.

When you try to pay a credit card bill on the due date, you will be an option to pay the amount in full and as well as minimum card payment. It is advisable to pay the complete bill, however, the option to pay minimum due should be considered in rare cases.

Here are few reasons why paying the minimum due on the credit card bill is not advisable.

It will sink your credit score  

It is okay to use the option of the minimum payment due on rare occasions when emergencies crop up. If you make it a habit to make minimum due payments regularly, then it may sink your credit score. Paying the minimum due every month will harm your credit score because 30% of your credit score is determined by the outstanding bills you have on the line.

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Inflate your monthly bills

The minimum payment on the credit card dues just constitutes 3% to 4% of your credit card due. Paying the minimum due will push the outstanding balance to the next billing cycle and your credit card bills get inflated and become difficult to manage as the high rate of interest are charged on the outstanding bills.

Managing the credit card turns to be a burden 

Leaving the credit card bills unpaid is the biggest mistake that one should avoid in life. Credit cards come with a high rate of interest of 20%- 24% and it will be difficult to manage these credit card bills.


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