What is Credit Cards minimum due amount and how can it affect you?

With the growth of digital transactions, a growing number of people have begun to use credit cards for their convenience. Because of their ease, credit cards have become a popular financial tool today. People, on the other hand, become reckless when it comes to bill payment. 

In your credit card statement, you’ll see two bill options: Total Outstanding Balance and Minimum Amount Due. Although the first option is reasonably straightforward (i.e., you must pay the same total sum if you wish to make full payment during the interest-free period), the second option may cause some confusion.

Some people develop the practice of paying only the minimum sum due while leaving the outstanding balance unpaid. Typically, the minimum amount due is 5% of the outstanding balance. To keep his card working, the user must pay a minimum amount due. If you pay the full amount due, the service provider will not be able to charge you late fees. However, paying the bare minimum will put you in trouble.

Know, what are the reasons why you should pay the entire outstanding balance or as much amount as you can-

Credit score

It is important to pay more than the full amount owed or the outstanding balance as much as possible to maintain a good credit score. If you have a high credit score, you will have no trouble getting a loan in the future. A good credit utilisation ratio is achieved by paying off the outstanding balance on time. If you don’t settle your outstanding balance on time, the banks will consider you a liability.


If you just keep paying your minimum amount due, then you have a lot of debt that can go above the credit limit. This means that you have to repay more debt, second, your credit card also becomes useless, plus you get negative credit scores.

Increased interest

The biggest problem that will come to you will be increased interest. You may feel that you have saved money by paying the minimum balance, but it can cause you a big loss in the long run. The higher the outstanding balance is collected, the higher the interest rate will be. You may have to pay double or even more of your amount.

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