Do you use a credit card? Every credit card user must have proper info about wisely using a credit card to avoid any hassles or issues related to it. Do you have any idea about the minimum amount due in credit card?
Being a credit card user, you would never expect to face such situation of not having enough funds to pay the credit card outstanding amount.
If you lost your job or are struggling with a medical emergency, or any other issue, and don’t have enough funds to pay you would miss the payment.
If you fail to make the payment within the due date, it will reflect on the credit card history and also reduce the credit score.
What is Minimum Amount Due in Credit Card?
As per the credit card terms, you need to pay the minimum amount for the credit card by the due date. You need to pay the minimum amount for the credit card to avoid any penalties. Making the minimum payment, you will be able to keep the account regular and avoid any negative remarks on the credit report.
The minimum amount is 3%-5% of the credit card’s total bill. The cardholder must make the minimum amount payment before the due date. The payment amount varies with the bank. So, the minimum amount may even go more than 5%.
The minimum amount gets calculated basing on the outstanding balance. When the credit card balance is higher, the minimum amount will go higher. The credit card company offers different options for making the payment of credit card billing amount.
|Minimum Amount Due
|SBI Credit Card
|5% of outstanding amount or Rs. 200 + GST
|HDFC Credit Card
|5% or minimum Rs. 200
|Citibank Credit Card
|5% or minimum of Rs. 100
|ICICI Credit Card
|5% of total amount
|Indusind Credit Card
|5% of total amount Due
|Kotak Credit Card
|5% or 10% of Total Amount Due
|HSBC Credit Card
|5% or minimum of Rs. 100
|Axis Credit Card
|5% or Total amount
What happens if you fail to pay minimum amount?
If in case, you miss making the minimum amount payment or pay less than it, the credit card company would charge you a late fee. You also get charged with promotional interest rates on the billing balance.
If you miss two payments back to back, the interest rate will grow as penalty charge which is quite higher than the interest rates.
If you fail to make the minimum amount paid within 30 days, the credit bureaus will receive notification from the credit card issuer about the late payment. Late payment or nil payment will reflect on the credit report and will remain for seven years.
If you fail to pay the minimum amount within due date, the current minimum amount will raise and additionally you have to pay late fees. When you fail to make minimum amount payment consecutively, in the later phase, it gets harder to make payment and match up with the current stage.
Use the credit card wisely and enjoy the benefits
The credit card holders can pay more than the minimum amount. With such option, you will stay out of the credit card debt, and you need not pay the interest on the credit card balance.
Make sure to pay at least the minimum amount of the credit card before the due date! Learning the major information, you can use the credit card wisely.