What is minimum due in credit card?

The Minimum Due (or Minimum Payment Due) is the smallest amount of money you must pay on your credit card bill by the due date to keep your account in good standing and avoid penalties. Here's the breakdown: * Why it exists: Credit card companies allow you to carry a balance month-to-month (called "revolving credit") rather than paying the full amount all at once. The minimum due is the price of this flexibility. * How it's calculated: It's usually a small percentage (often 2% to 5%) of your total outstanding balance, plus any past due amounts and all interest and fees accrued in the current billing cycle. * The Trap: While paying only the minimum due avoids late fees and damage to your credit score, it's generally a bad financial move! Because the minimum payment often only covers the interest and a tiny fraction of the principal balance, your debt takes much longer to pay off, and you'll end up paying a massive amount in interest over time. The best practice is always to pay the full "Total Amount Due" whenever possible.

Think of the minimum due as the bare minimum to satisfy the bank. If your total bill is ₹50,000, and your minimum due is ₹2,500, paying that ₹2,500 is your contractual obligation. What happens if you only pay the minimum due? 1. Interest Charges: You will be charged interest on the remaining balance (₹50,000 - ₹2,500 = ₹47,500). This interest is usually very high and can quickly compound. 2. Longer Debt: It drastically extends the time it takes to become debt-free. The only time paying just the minimum due makes financial sense is if you have a genuine cash flow crunch and need to preserve cash for higher-priority debts or an emergency. Otherwise, aim to pay the full statement balance to utilize the interest-free grace period.