Why the minimum payment is a trap
Each month, interest of around 3.75% plus GST is added to what you owe, which is close to 4.4% a month. A minimum payment of 5% therefore clears less than 1% of the balance. The balance shrinks very slowly, and the minimum due shrinks with it, so the debt can drag on for years.
On a ₹50,000 balance at 3.75% a month, paying only a 5% minimum takes about 30 years 5 months and costs about ₹2.61 lakh in interest and GST. Paying a fixed ₹5,000 a month clears it in 1 year 2 months.
Questions people ask
What is the minimum amount due?
Usually about 5% of your outstanding balance, plus any EMIs, fees and overlimit amount. Paying it avoids a late fee, but interest is still charged on the full balance.
How much interest do credit cards charge?
Most Indian cards charge 3% to 3.75% a month, which is about 36% to 45% a year, plus 18% GST on the interest. You also lose the interest-free period on new purchases while a balance is unpaid.
What should I do if I can’t pay in full?
Pay as much above the minimum as you can, stop using the card until it’s cleared, and consider converting the balance to an EMI or taking a cheaper personal loan to pay it off.
Method
Each month: interest = balance × monthly rate, plus 18% GST on the interest; then the payment (the larger of the minimum % and ₹200, or your fixed amount) is subtracted. Real statements differ slightly because interest is charged daily from each transaction date and fees may apply. Educational estimate only.