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The Basics of Minimum Due on Your Credit Card




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You can calculate the minimum amount due on your credit card by looking at your monthly billing statement. It is the percentage of the outstanding balance. Your Kotak credit card statement will show you the exact minimum amount due and the total amount due for the credit cycle for that particular month. The accurate percentage may differ according to your credit card type and the card issuer’s changing policy.

For example, Your Kotak credit card statement has an outstanding balance of ₹1,00,000; the minimum amount due is 5% of the outstanding amount; your minimum amount payable would be ₹5,000.

Importance of Paying the Minimum Amount

It’s crucial to make the minimum credit card payment to avoid damage to your credit card account and overall financial health. Below are the reasons why you should pay the minimum amount due:

  • Prevents Paying Unwanted Late Fees

The credit card issuer may charge late payment fees if the credit card minimum payment is unpaid by the due date. By making on-time payments, which vary depending on the outstanding balance, you can prevent your extra fees

If you fail to make the minimum payment on time, your card issuer may charge you late fees. Depending on the amount due, these costs can vary from a few hundred to several thousand rupees.

  • Maintains Credit Score

Your credit score determines your future prospectus of getting credit and is the numerical indicator of your creditworthiness. While making late payments might lower your credit score, paying the minimal amount due on your credit card on time contributes to maintaining a good credit history.

Your card issuer sends late or missed payment records to credit bureaus each time you fail to pay your credit card bill. It harms your credit score and makes it more difficult for you to receive credit lines or loans in the future.

  • Helps in Prevents High-Interest Charges

The leftover balance is carried to the next billing cycle when the minimum payment is unpaid. If improperly handled, this amount is subject to interest charges, which may quickly add up and create a debt cycle. Therefore, paying off the entire amount owed as soon as possible is recommended.

You may avoid paying hefty interest rates by making your payments on time. You can also avoid falling further into a credit card debt trap and remove the financial burden that makes it harder to pay off your debt.

Risks of Only Paying Minimum Due in Credit Card

● Your debt keeps growing monthly: When you pay only the minimum, interest gets added to your existing balance every month. It makes the amount owed go up constantly instead of coming down.

● It takes a very long time to become debt-free: If you pay only a minimum, it may take decades to clear your entire balance. You continue paying high interest for many years.

● Your credit score suffers with time: Regularly paying low minimums shows lenders you find it hard to manage payments. Over time, this makes it harder to get cheap loans or credit cards.


You must pay at least the minimum amount due on your credit card to prevent an interruption in your credit card. However, paying only minimum amounts due on credit cards month after month may seem OK initially but has far-reaching financial implications in the long run. The accumulating interest costs result in debt ballooning massively over time. It is prudent to pay more than the minimum to clear dues sooner and avoid lifelong debt cycles weakening personal finances.


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