Credit cards

The minimum due trap on credit cards

Why paying only the minimum amount due keeps you in debt for years, what RBI rules protect you, and how to get out faster.

By Saifu team · 5 October 2026 · 2 min read

Try it: Minimum due calculatorSee how long it takes to clear a credit card bill if you pay only the minimum amount due, how much interest and GST that costs, and what a fixed payment saves.

Every credit card statement shows two numbers: the total amount due and a much smaller minimum amount due. Paying the minimum by the due date avoids a late fee and keeps the account from being reported as late. It does not stop interest.

What happens when you pay only the minimum

Say you owe ₹1,00,000 on a card that charges 3.75% a month, and the minimum due is 5% of the bill. Each month about ₹3,750 of interest is added, plus 18% GST on that interest, which is about ₹675 more. A 5% minimum barely covers that and takes off very little of what you owe.

Run that forward and the balance takes decades to clear, and the interest paid ends up several times the amount you first owed. You can see it month by month in the minimum due calculator.

It gets worse in real life, because while any part of last month's bill is unpaid, new purchases lose their interest-free period and start collecting interest from the day you swipe.

The rules that protect you

RBI's credit card directions require that:

The minimum amount due must not cause negative amortisation. Paying it must never make your balance grow.
Your statement must warn that paying only the minimum stretches repayment over months or years, with interest on interest.
Interest is charged only on the amount still outstanding after your payments.
A late fee can be charged, and the account reported as past due, only after more than 3 days past the due date.
You can change your billing cycle at least once, which can help line the due date up with your salary.

How to get out faster

Stop using that card for new spends until the balance is cleared.
Pay a fixed amount every month, well above the minimum. Even doubling it cuts years off.
Move the balance to something cheaper. Converting the balance to an EMI, or a personal loan with no GST on interest, usually costs far less than 3.75% a month.
Set up auto-pay for at least the minimum so a busy month never adds a late fee and a late mark on your credit report.

Sources

Card terms change. Check the bank's own page before you rely on a figure here. Posts never contain referral or affiliate links from the writer.

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