Credit cards can be a great financial tool—but only if used wisely! Many people fall into the "minimum due trap", thinking that paying a small amount on their bill keeps them financially safe. But in reality, this is a costly mistake that can lead to crippling debt and a sinking credit score.
The Minimum Due Myth
When you receive your credit card statement, you’ll see two amounts: Total Due: The full amount you owe. Minimum Due: A small percentage (usually 5%) of the total bill.
Many people believe that paying the minimum due means they are safe from late fees or penalties. While this is technically true, it doesn’t stop interest from piling up on the remaining balance.
For example:
You owe ₹15,000 on your credit card. You pay only the ₹500 minimum due. The remaining ₹14,500 starts accumulating interest at nearly 40% annually! Next month, your balance grows, and you end up paying way more than you originally spent.
How This Trap Affects You
- Sky-High Interest: Credit cards charge up to 40% interest per year on unpaid balances.
- Debt Spiral: Paying only the minimum means your debt keeps growing.
- Credit Score Damage: Banks see high outstanding balances as a risk, lowering your CIBIL score.
The Smartest Move? Pay in Full!
Want to avoid this trap? Here’s how: Always pay your full bill amount before the due date. If struggling, at least pay more than the minimum to reduce interest. Avoid using your credit card for unnecessary expenses.
Pay the full amount to stay debt-free and financially secure.
