What is the minimum amount due on a Credit Card?
The minimum amount due on a credit card is the amount you must pay on or before the payment due date to avoid late fees.
The bank ensures that you may repay a portion of the principle outstanding each month by calculating a minimum amount.
What if I Pay only Minimum Amount Due?
In the event that you are unable to pay the entire bill amount, the 'Minimum Payment Due' is the small portion of the total outstanding bill amount that you must pay to the bank. A few features are described below.
It is the amount that consumers must pay to their credit card provider on a regular basis in order to keep their credit account active during the billing cycle.
By paying the minimal amount due, the user ensures that they will only have to pay interest as and when it is due, with no additional late fees.
A user's irregular credit repayment behaviour will be reported to the credit bureaus if he or she fails to make credit card bill payments on schedule for a regular length of time. The user, on the other hand, will not be reported to the credit bureaus if he or she has managed to pay at least his minimal dues on time.
The user's credit card repayment behaviour has a direct impact on their credit score. Failure to pay credit card balances on time will have a negative impact on your credit score. However, if the user has made at least the minimal payments on time, his or her credit score will not be adversely affected.
How is the Minimum Due Amount Determined?
In most cases, the minimum amount payable is set at 5% of the total outstanding balance as of the date the credit card statement is printed. However, in a select circumstances, the following fees may be added to the user's minimum payment due:
The interest amount will be applied to the minimum amount owing if a user decides to convert his or her purchases to EMIs.
If there is a minimum balance from the previous billing cycle that has not been paid
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