The Minimum Due Trap
Paying only minimum due feels safe. But your balance barely shrinks while interest compounds at 3.5%/month. See how long it really takes to pay off.
Your Outstanding Balance
Your current credit card outstanding amount.
Most banks use 5% of outstanding or ₹200, whichever is higher.
Default 3.5%/month (42% p.a.) — standard for most Indian cards.
Time to Pay Off
How Your Balance Shrinks (or Doesn't)
Payment Schedule
| Month | Balance | Min Due | Interest | Principal |
|---|
How we calculated this
Minimum due: max(Balance × MinDue%, ₹200)
Interest: Balance × Monthly Rate%
Principal paid: Minimum Due - Interest
New balance: Balance - Principal Paid
Trap: When interest exceeds the minimum payment, your balance grows instead of shrinking. At that point, you can never pay off the debt.
Termination: Simulation ends when balance drops below ₹1 or after 600 months (50 years) as a safety limit.
The Minimum Due Trap Explained
Every credit card statement shows a "minimum due" — typically 5% of your outstanding balance or ₹200, whichever is higher. Paying this amount keeps your account in good standing and avoids late fees. But that's where the good news ends.
Here's the trap: at 3.5% monthly interest, most of your minimum payment goes toward interest, not principal. On a ₹50,000 balance, your minimum due is ₹2,500 but ₹1,750 of that is pure interest. Only ₹750 actually reduces your balance. At this rate, it takes years to pay off what should have been a few months.
With very low minimum due percentages (like 2%), the situation is even worse — the interest can exceed the minimum payment, meaning your balance actually grows every month even while you're "paying." This is the debt spiral that traps millions of Indians.
The solution: always pay the full amount. If you can't, pay as much above the minimum as possible. Even ₹2,000-3,000 extra per month can cut years off your payoff time. Or convert to EMI at 12-18% p.a., which is less than half the revolving rate.
Frequently Asked Questions
What happens if I only pay the minimum due on my credit card?
You avoid late fees, but interest is charged on the FULL outstanding amount from purchase date. The balance barely shrinks each month.
How is credit card minimum due calculated?
Typically 5% of outstanding or Rs 200, whichever is higher. Some banks use different percentages.
Does paying minimum due affect CIBIL score?
Paying minimum due prevents your account from being marked delinquent, but high utilization from carrying the balance still hurts your score.
Related Tools
- Interest Cost Calculator — What carrying a balance really costs
- EMI Cost Calculator — Compare EMI conversion vs revolving credit
- Credit Utilization Calculator — How your outstanding affects CIBIL
- Annual Fee Break-Even Calculator — Is your card's fee worth it?