Wondering what is the minimum amount due on a credit card? The answer is simple. As the phrase suggests, it is the minimum amount that you have to pay towards your credit card bill.
You can pay this amount on or before the due date. Generally, you don’t need to calculate this amount as the issuer will mention it on your credit card bill.
However, it is usually 5% of the total outstanding amount, including any balance from the previous month. The benefit of paying the minimum amount is that you can avoid any late payment charges or penalties.
Your credit card limit is assigned to you based on your financial standing, and the way you manage your existing credit. Naturally, paying only the minimum amount every month isn’t the best way to get a higher limit.
Here are some smart ways to increase your credit card limit.
Request your bank or the credit card issuing company to enhance your credit limit
Boost your credit score/ CIBIL score to up to 750 or above
Keep your credit utilisation ratio below 30%
Check for an annual hike with your issuer
Opt for a credit card with a higher credit limit
Reduce your existing credits and loans
Maintain proper discipline when paying credit card dues
While all these points can help in increasing your card limit, you need to apply for a credit card that best fits your monthly financial requirements. Hence, before increasing the card limit, ensure your monthly obligations are well within limits.
About Credit Cards Services
- Apply for Credit Card
- Best Fuel Credit Card
- Business Credit Card
- Credit Card Settlement
- Corporate Credit Card
- Credit Card against Fixed Deposit
- Credit Card Documents
- Credit Card Eligibility Criteria
- Credit Card EMI
- Features & Benefits of Credit Card
- Interest Rate on Credit Card
- International Credit Card
- Credit Card Limit
- Loan on Credit Card
- Credit Card Lounge Access
- Credit Card Netbanking
- Credit Card Bill
- Credit Card Pin Generation
- Credit Card Reward
- Shopping Credit Card
- Check Credit Card Statement
- Types of Credit Card
- Credit Card Billing Cycle
- Credit Card Meaning
- Best Credit Card In India
Credit Cards Partners at Bajaj Markets
Non Partners Credit Cards
FAQs on Minimum Amount Due on a Credit Card
The minimum amount due refers to the mandatory amount from the total credit card bill you must pay before the payment due date. It is a small percentage, usually 5%, of the total amount spent.
You avoid the late payment fine by paying only the minimum amount, but the outstanding amount will continue to accrue interest. Also, the outstanding dues from the previous months would get added to the next month’s credit card bill.
A late payment fee will be levied initially when you don't pay your credit card bill before the due date. Also, you would lose out on the interest-free period on the credit card, and your total outstanding dues would start to accrue interest.
Any new transactions you make will also start to accrue interest. This can affect your credit score and credit history.
Yes. When you are paying the minimum amount due on a credit card, your credit score could get affected.
You will not receive any interest-free credit card period if you have paid the minimum payment. Besides, companies will charge the interest amount from the date of your purchase. This interest amount shall accumulate until you pay the dues.
Typically, the minimum amount due on a credit card is around 5% of the total outstanding amount of the current month.
If you are short on funds, it is acceptable to pay only the minimum amount due on the credit card. However, to avoid any debt situation, in the long run, it is advisable to pay the full outstanding amount.
You can check the credit card statement issued by the bank each month to determine the minimum amount due on a credit card. Check the due date on your statement to make the payment on time.
Paying back the minimum amount is considered risky because of a number of reasons. First, by paying only the minimum amount due on a credit card, the outstanding amount gets carried forward to the next month.
This amount attracts interest, which adds to your debt. Secondly, if you continue to pay only the minimum amount due on a credit card, your total outstanding barely reduces. Thus, you end up paying significantly more for every month that you leave the balance unpaid.
Another reason is that the balance amount of the previous month gets added to the minimum amount of the current month. And finally, the credit score and the credit limit take a hit if you only consider paying the minimum amount due on the credit card.
Yes. You must pay the interest on the outstanding amount if you pay only the minimum due and not the total outstanding amount before the grace period.
The total due amount is the outstanding credit of the current billing cycle, along with the balance carried over from the previous bill. On the other hand, the minimum amount due on a credit card is the minimum payment needed to avoid a late payment penalty.
The minimum amount due on a credit card is set at 5% of the total amount due. You can calculate the outstanding amount by subtracting that from the total due amount.
So, if your total amount due is ₹10,000, then your minimum amount due will be ₹500, and the total amount due will be ₹9,500.
Enter Your OTP
