The minimum due feels like an option the bank is offering you, printed in the same place as the total. It is really a warning. It tells you how little you can pay and still keep the account current, and it says nothing about how much the rest will cost you.
Let’s run the numbers
Suppose you owe ₹50,000 and stop using the card. Assume interest of 3.5% a month, and a minimum payment of 5% of the balance including that month’s interest, with a floor of ₹250. We are also ignoring GST and fees, which would make this worse.
| Month | Interest added | Minimum payment | Balance after payment |
|---|---|---|---|
| 1 | â‚ą1,750 | â‚ą2,588 | â‚ą49,163 |
| 2 | â‚ą1,721 | â‚ą2,544 | â‚ą48,339 |
| 3 | â‚ą1,692 | â‚ą2,502 | â‚ą47,529 |
In the first month, only about â‚ą838 of your â‚ą2,588 reduces the debt. The other â‚ą1,750 goes to interest.
If you keep paying only this minimum, the loan takes about 14 years to clear, and you repay about â‚ą1.48 lakh on a â‚ą50,000 balance. That is roughly three times what you borrowed, and it assumes you never spend another rupee on the card.
This is a simple illustration. Your card’s rate and minimum-due formula will differ, so use your own statement for the real figures.
Three ways the damage spreads
You lose the free credit on new spending. Issuers usually give an interest-free period only if the previous balance has been cleared. Once you are carrying a balance, new purchases may be charged interest from the day you make them. Our guide to the interest-free period explains this with dates.
Your utilisation stays high. A balance that barely falls keeps you near your limit, and that can weigh on your score. It may also make new credit harder to get. We cover this in our guide to credit utilisation.
Your budget tightens each month. Interest becomes a fixed monthly bill that buys you nothing. That is often when people start using one card to pay another, or take an instant loan to cover a repayment. Both can make matters much worse.
What RBI’s rules do, and what they don’t
As of November 2026, RBI’s rules say that issuers must explain what paying only the minimum amount means for you. The terms must be set so that there is no negative amortisation, meaning the balance shouldn’t keep growing just because you pay the minimum. Unpaid charges and taxes shouldn’t be capitalised for charging interest either.
These rules are useful, but they don’t make revolving cheap. You can follow every rule and still pay several times what you borrowed, as the example above shows.
If you are already stuck
These steps may help. Which of them fits depends on your income and your total debt.
- Stop using the card until the balance is cleared. This is the hardest step, and the most important.
- List every debt with its outstanding balance, rate and minimum payment.
- Pay more than the minimum on one debt. Keep paying at least the minimum on the others. The card with the highest rate is usually the best one to tackle first.
- Ask your issuer about converting the balance to EMIs. It may cost less than revolving. Ask for the rate, processing fee, GST, foreclosure charge and total payable, in writing.
- Compare a personal loan carefully. A lower rate can help, but only if you close the loop and stop spending on the card. Check the true cost of the loan, including its fees.
- Speak to your lender early if you really can’t pay. Ask what restructuring or repayment options exist.
Be careful with a “settlement” offer. A “settled” status on your report means you paid less than you owed, and it can hurt your score. Aim for “closed” if you can.
Things to avoid
- Instant loan apps. Some are illegal. Illegal lenders may charge heavy hidden fees and harass borrowers. Learn how to spot fake loan apps before you download anything.
- Borrowing to repay other loans, unless the new loan is clearly cheaper and you have a plan to clear it.
- Paying someone to “fix” your debt. Be wary of agents who ask you for card details or OTPs, or who ask you to stop talking to your bank. Never share OTPs, PINs or card details.
- Skipping payments altogether. A missed payment can bring late charges and damage your record. If you can’t pay in full, pay at least the minimum and contact the issuer.
How to avoid it in the first place
Set your auto-debit to the total amount due, not the minimum. If your bank offers both, choose the full amount and keep enough in the account. Check your statement before the debit date, and spend only what you already have set aside for the bill.
Bottom line
The minimum due is a safety net for a bad month, not a repayment plan. It protects your record from a missed payment, but it doesn’t protect your money. If you are revolving a balance, stop new spending, pay above the minimum and speak to your lender early. Check your own terms, as formulas and rates vary by issuer.
Frequently asked questions
Does paying the minimum due hurt my credit score?
Paying at least the minimum by the due date keeps the account from being treated as overdue, which protects your repayment record. It can still hurt indirectly, because a growing balance pushes up your credit utilisation. Interest also keeps building on what you owe.
How is the minimum amount due calculated?
Each issuer sets its own formula, which is shown in your MITC. It is often around 5% of the outstanding amount, or a similar small share, plus items such as EMIs, fees, interest and overdue amounts. RBI's rules say the terms must ensure there is no negative amortisation.
Is it okay to pay only the minimum for one month in an emergency?
It is better than missing the payment. Still, expect interest on the balance and probably on any new purchases as well. If you do it, stop using the card and pay as much as you can as soon as possible.
Should I take a loan to pay off my card?
Be careful. A cheaper loan can reduce the interest, but it won't solve the problem if you keep spending on the card. Borrowing to repay other loans can increase your debt, so compare the total cost and talk to your bank first.
