1. What is Minimum Payment?

The minimum payment is the smallest amount you must pay each month to keep your credit card account in good standing. It's typically calculated as a percentage of your balance plus any fees or interest charges.

2. How Minimum Payment is Calculated

The standard formula for minimum payment is:

Where:

• \( \text{Balance} \) — Current credit card balance (USD)
• \( \text{Min %} \) — Minimum payment percentage (typically 1-3%)
• \( \text{Fees} \) — Any additional fees or interest charges (USD)

Note: Some card issuers may use a flat dollar amount (e.g., $35) if the percentage calculation is lower.

3. Why Minimum Payment Matters

Details: While paying the minimum keeps your account current, it extends repayment time and increases total interest paid. Paying more than the minimum saves money on interest.

4. Using the Calculator

Tips: Enter your current balance, the card's minimum payment percentage (usually found in your card agreement), and any additional fees. The calculator will show your estimated minimum payment.

5. Frequently Asked Questions (FAQ)

Q1: What's a typical minimum payment percentage?
A: Most cards use 1-3% of the balance, often with a minimum dollar amount (e.g., $25 or $35).

Q2: Does paying minimum affect credit score?
A: Paying at least the minimum on time helps your score. However, high balances relative to your limit can hurt your score.

Q3: How long to pay off paying only minimum?
A: It can take many years and cost much more in interest. A $5,000 balance at 18% APR could take over 20 years to pay off with minimum payments.

Q4: Can minimum payment change?
A: Yes, it changes with your balance and if the issuer adjusts terms (with notice).

Q5: Is there a maximum minimum payment?
A: Some cards cap it at a certain amount, especially for very large balances.