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What happens if I pay only the minimum amount due on my credit card?
Updated · CardKhoj Editorial Team
Short answer
Paying only the minimum amount due avoids a late fee and keeps your account in good standing, but you lose the interest-free period. Interest of about 3–3.75% per month is charged on the entire outstanding balance — and on every new purchase from the day you make it — until you clear the full amount.
What the minimum due is
The minimum amount due is usually 5% of your outstanding balance plus any EMIs, fees and over-limit amount. Paying it means you are not a defaulter, and no late fee is charged.
The hidden cost
- Interest is charged on the full statement balance, not just the unpaid part, from each transaction date.
- New purchases also attract interest immediately, because you are now “revolving” a balance.
- GST at 18% is added on the interest.
Example
Say your bill is ₹50,000 and you pay the ₹2,500 minimum each month at 3.6% monthly interest. It would take years to clear, and you would pay tens of thousands of rupees in interest. Try our credit card interest calculator to see your own numbers.
Better options if you cannot pay in full
- Convert the bill to an EMI — usually 13–18% a year, far cheaper than revolving.
- Take a lower-rate personal loan to clear the card.
- Use a balance transfer offer to another card at a lower rate.
This answer is general information, not personalised financial or tax advice. Rules, rates and limits change — confirm with your bank, the RBI or a qualified adviser before making decisions.