Minimum Due in Credit Card (India): The Complete 2025 Guide

Every month your credit card bill shows two numbers: Total Amount Due and Minimum Amount Due. At first glance, the minimum due seems like a relief. Instead of paying ₹50,000 in full, you could just pay ₹2,500 and avoid penalties.

But the reality is different. Paying only the minimum due in credit card bills is the fastest way to lose your interest-free period and start paying 36–42% annual interest in India.

This article explains what minimum due really means, how it is calculated, what the RBI says, and why depending on it regularly can trap you in long-term debt.

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What is Minimum Due in Credit Card?

The minimum due in credit card is the smallest part of your outstanding bill that you must pay to avoid being reported as overdue.

In India, this is generally around 5% of the total outstanding balance, plus:

• Any EMI instalments
• Taxes and fees
• Past due amounts

Source: RBI FAQs on Credit Cards

Paying this amount prevents late fees, but it does not protect you from interest charges on the remaining balance.

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How Minimum Due is Calculated

Example:

• Outstanding balance = ₹50,000
• Minimum due percentage = 5%
• Other dues (fees/EMIs) = ₹500

Minimum Due = (5% of 50,000) + 500 = ₹3,000

If you pay only ₹3,000:

• You avoid late payment fees
• You still owe ₹47,000
• Interest is charged on the remaining ₹47,000 from the date of each transaction

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Minimum Due vs Total Due

Aspect	Total Due	Minimum Due
Interest-free days	Yes	Lost
Interest charges	None (if paid in full)	High (daily compounding)
Credit score impact	Positive	Neutral to negative over time
Repayment timeline	Ends each cycle	Prolonged
RBI position	Encouraged	Allowed, but risky

RBI guidance is clear: if cardholders do not clear dues in full, the interest-free period is suspended and interest is charged from the transaction date.
Source: RBI Notification (April 21, 2022)

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Pros and Cons of Paying Minimum Due

Pros

• Avoids late payment fee
• Keeps account from being reported overdue
• Protects score from immediate delinquency tags

Cons

• Loss of interest-free period
• Very high interest charged on remaining balance
• Debt takes much longer to repay
• High utilization may reduce credit score gradually

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RBI Rules on Minimum Due in Credit Cards

1. Interest-free period ends when full dues are not paid; interest applies from transaction date.
2. No negative amortization: minimum due must be structured so balances reduce, not grow silently.
3. No capitalization of fees: banks cannot add unpaid charges to principal for compounding.
4. Disclosure is mandatory: card statements must show implications of paying only minimum due.

Source: RBI Master Directions – Credit Cards

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The Real Cost of Paying Only Minimum Due

Cost Comparison Table

Month	Outstanding	Minimum Due Paid (5%)	Interest (36% APR approx.)	Balance Carried Forward
1	₹50,000	₹2,500	₹1,500	₹49,000
3	₹47,000	₹2,350	₹1,410	₹46,000+
6	₹43,000	₹2,150	₹1,290	~₹42,000+
12	₹35,000	₹1,750	₹1,050	~₹34,000+

Even though you keep paying every month, interest ensures your balance reduces very slowly.

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Why Minimum Due is Risky

• Payments mostly cover interest rather than principal
• All future transactions accrue interest from day one
• High utilization over many months weakens your credit score
• Some issuers like SBI Cards have revised minimum due formulas to push faster repayment

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Illustrative Scenario

Consider a cardholder with a ₹50,000 balance. By paying only the minimum due of ₹2,500 per month, they might believe the debt is shrinking. But after three months, they have already paid over ₹7,500 in instalments and nearly ₹4,000 in interest, with the balance still close to ₹47,000.

This example is illustrative only, but it shows how paying minimum due repeatedly makes debt linger for years.

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Alternatives to Paying Minimum Due

• Convert to EMI: lower fixed rate, predictable tenure
• Balance transfer: move balance to another card with lower promotional rate
• Personal loan: if interest rate is lower than credit card APR
• Debt avalanche method: repay highest APR debt first
• Issuer hardship plans: some banks provide structured relief on request

See our full guide on How to Settle a Loan Effectively in India

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Best Practices to Stay Out of the Minimum Due Trap

• Enable auto-debit for Total Amount Due, not minimum due
• Make part-payments during the billing cycle to reduce daily interest
• Keep credit utilization under 30 percent of your limit
• Never miss EMI instalments, otherwise the entire amount attracts revolving APR
• If you must pay only minimum due once, clear all dues within the next cycle to regain the interest-free period

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FAQs on Minimum Due in Credit Card

Conclusion

The minimum due in credit card bills is not a repayment strategy. It is a safety net that prevents immediate penalties but at the cost of high interest and prolonged debt.

If you want to use your credit card wisely in India, pay the total due every cycle, regain your interest-free period, and avoid letting minimum due become a habit.

Explore more debt-related tips and templates on our official SDS Blog.

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