Credit Card Minimum Due: What Paying Only the Minimum Costs

If you pay only the 5% minimum due on a ₹1 lakh credit card bill, it takes about 37 years 8 months to clear. You pay about ₹5,39,300 in interest and GST along the way.

How the minimum due works

The minimum due is a small part of your bill, often around 5% of the balance. Paying it keeps your account in good standing. But interest still runs on the whole unpaid balance. Cards typically charge 3% to 4% a month, plus 18% GST on the interest.

At 3.75% a month, that is 45% a year before GST. Almost every other loan is cheaper.

₹1 lakh balance at 3.75% a month

The figures assume no new spending on the card. The minimum due shrinks as the balance shrinks, which is why it drags on so long.

Why it takes so long

In the first month, interest on ₹1 lakh at 3.75% is ₹3,750. GST adds ₹675. The minimum due is ₹5,000. So only ₹575 of your payment reduces what you owe. Next month the minimum due is a little smaller, and the cycle repeats.

Small increases make a big difference

Paying ₹10,000 a month instead of the ₹5,000 starting minimum clears the debt in 1 year 2 months instead of 37 years 8 months. It saves about ₹5 lakh in interest and GST. The key is to pay a fixed amount that does not shrink as the balance falls.

The hidden cost: no interest-free period

While you carry a balance, new purchases usually start charging interest from the day you buy. You lose the interest-free period until the full bill is cleared. So the real cost of revolving is often higher than the table shows.

How to get out

1. Stop using the card for new spending until the balance is clear.
2. Pay a fixed amount, not the minimum. Even ₹5,000 a month cuts the time sharply.
3. Move the balance to a cheaper loan. A personal loan or a loan against an FD usually costs far less than a card. Use it only to clear the card, not to spend more.
4. With several debts, pay the costliest first. The debt payoff calculator shows the order.

Using a card without paying interest

A credit card is free to use if you pay the full statement balance by the due date every month. You then get the interest-free period on purchases. The trouble starts only when you carry a balance. If you cannot pay in full this month, pay as much as you can and stop new spending.

A safe habit

Set up autopay for the full amount, or at least the minimum, so you never miss a due date. Then pay the rest yourself before the due date. A missed payment adds late fees and hurts your credit score.

Check your own card

Put in your balance, rate and payment in the credit card interest calculator. To see how card debt fits with your other loans and savings, run the free financial health check.