The Credit Card Minimum Due Trap: What It Really Costs
Updated 4 October 20265 min read
Your credit card statement shows two numbers: the total due and the minimum due. Paying the minimum keeps your account in good standing — and quietly turns a short-term balance into one of the most expensive loans you can take.
How expensive is card debt?
Most Indian cards charge 3–3.75% interest a month on unpaid balances — about 36–45% a year — and 18% GST is added to that interest. On ₹1,00,000 at 3.5% a month, the first month's interest plus GST is about ₹4,130.
Interest is charged from the date of each transaction, not the due date, and once you carry a balance, new purchases lose their interest-free period too.
The numbers on ₹1 lakh
| How you repay (42% a year + GST) | Time to clear | Interest + GST paid |
|---|---|---|
| Minimum due only (5%, ₹200 floor) | ≈ 34 years | ≈ ₹4.6 lakh |
| ₹5,000 a month | 44 months | ≈ ₹1.16 lakh |
| ₹10,000 a month | 14 months | ≈ ₹31,700 |
The minimum due shrinks as your balance shrinks, so you pay less and less principal each month. That's what stretches repayment over decades.
How to get out
- Stop using the card for new spending until it's cleared.
- Pay a fixed amount well above the minimum — the same amount every month, even as the minimum falls.
- Swap expensive debt for cheaper debt: a personal loan or the card's own EMI conversion at 12–16% is far cheaper than 40%+ revolving interest. Check processing fees and GST.
- If you have several cards, pay minimums on all and throw extra money at the highest-rate one first.
Frequently asked questions
Does paying the minimum due hurt my credit score?
Paying at least the minimum on time avoids a late-payment mark, but a high outstanding balance raises your credit utilisation, which can lower your score.
What if I can't pay even the minimum?
Call your bank before the due date and ask about converting the balance into an EMI. Missing payments adds late fees and damages your credit history.
This guide is for general education and is not investment, tax or legal advice. Rules and rates change; check the latest official sources or a qualified adviser before acting.