Lesson 2 of 3 · 6 min
The minimum-due trap
Paying 5% feels responsible and quietly costs about 51% a year. GST is charged on the interest too, and new spending stops being free the same day.
Every statement shows two amounts: the total due and the minimum due, usually about 5% of the total. Paying the minimum stops the late fee and the account stays regular. That is all it does.
The rest of the balance rolls over at roughly 3 to 3.75% a MONTH. Your interest-free window on new spending is gone too, until the whole balance is cleared.
The actual document
The two numbers in the box, and what choosing the smaller one costs
Kaveri Bank · Platinum Credit Card
Statement · 23 August 2026
- Card ending
- XXXX 4417
- Statement period
- 24 Jul – 23 Aug 2026
- Payment due date
- 12 September 2026
- Credit limit
- ₹1,50,000
This statement
- Opening balance₹0
- Purchases this month₹40,000
- Payments received₹0
- Closing balance₹40,000
If you pay only the minimum
- Minimum amount due (5%)₹2,000
- Balance carried forward₹38,000
- Interest next month at 3.5%₹1,330
- GST on that interest at 18%₹239
A fictional statement. Rates vary by card; the shape of the trap does not.
Tap a numbered marker to see what that line means.
- 1
Minimum amount due (5%). Paying this does one thing: it stops the late fee and the account stays reported as regular. It is not a smaller bill, and the card company prints it in the same size box as the real one.
- 2
Interest next month at 3.5%. Charged monthly, so compounding takes it past 50% a year — and it runs from the purchase date, not from the due date. Your interest-free window on NEW spending closes too, until the whole balance is cleared.
- 3
GST on that interest at 18%. Tax on the interest, which people forget is there. The cost of paying ₹2,000 instead of ₹40,000 is ₹1,569 in the first month alone, before you have bought anything new.
- 4
Total amount due. Pay this in full by 12 September and the entire month of credit cost nothing at all — that is the deal a credit card actually offers. Everything else on this page is what happens when the deal is declined.
Your turn
Total due is ₹40,000 and the minimum due is 5%. How many rupees is the minimum due?
Your turn
A card charges 3.5% a month. Compounded over a year, roughly what annual percentage is that?
Work it out yourself
Enter a ₹40,000 balance at 3.5% a month and pay only the minimum. Watch how many YEARS it takes to clear, and what the interest plus GST adds up to.
Credit Card Minimum Due Calculator| What you pay | What happens next |
|---|---|
| The full ₹40,000 | No interest at all. The interest-free window stays open for next month's spending. |
| The ₹2,000 minimum | No late fee, but roughly 3.5% monthly interest on the rest, GST on that interest, and no window on new purchases. |
| Nothing | Late fee plus interest — and once the account is past due for more than three days, RBI's rules let the bank report it to the credit bureaus. |
But I paid something — isn't that enough?
KabirTara
Kabirasking
I paid the minimum. The app showed a green tick, the account is regular, nobody called me. So what exactly did I get wrong?
Taraexplaining
Nothing was wrong. It just did less than you think. You bought yourself out of the late fee. You did not buy yourself out of the interest.
Kabirasking
So the rest just sits there quietly?
Taraexplaining
It sits there growing. And the window that made your card free — the one that opens only if last month's bill was cleared fully — stays shut until the balance is zero.
Kabirasking
Even on things I buy tomorrow? I haven't even been billed for those yet.
Taraexplaining
Even those. Once a balance is carried, new purchases start accruing from the day you swipe. That is the part the word 'minimum' hides — it reads like a floor, and it works like a switch.
Check yourself
1 / 3
Kabir asks
Total due is ₹40,000 and the minimum due is 5%. What is the minimum, and what happens to the rest?
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