# The Credit Card Minimum Due Trap, in Real Numbers > Paying only the minimum due on INR 1 lakh takes 31 years and costs INR 4 lakh in interest and GST. Why, and the simple change that ends it in 41 months. Source: https://trykosh.com/learn/credit-card-minimum-due-trap Guide - Credit cards # The credit card minimum due trap The minimum amount due is designed to feel manageable, and it is. That's the problem. Here's what paying only the minimum really costs, why the debt barely moves, and how to get out. Updated 25 October 20266 min readBy the Kosh team On this page[What the minimum due is](#what-it-is)[What paying only the minimum costs](#cost)[Why the balance barely moves](#why)[The simplest fix: freeze the payment](#fix)[Cheaper ways out](#cheaper-ways-out)[When paying the minimum is fine](#when-fine)[What it does to your credit score](#credit-score)[FAQs](#faq) ## What the minimum due is The minimum amount due is the smallest payment that keeps your card account in good standing. Most Indian banks set it at about **5% of the outstanding balance**, with a floor such as INR 200, plus anything that must be paid in full that month: card EMIs, fees, GST and any amount over your credit limit. The exact formula is in your card's most important terms and conditions. Paying it does two useful things: no late fee, and no missed payment on your credit report. It does nothing about interest. Everything you leave unpaid carries interest at the card's monthly rate, plus 18% GST on that interest. RBI's card rules require the minimum due to be set so that it doesn't cause negative amortisation, meaning the balance shouldn't grow if you pay it. As you'll see, "doesn't grow" is a low bar. ## What paying only the minimum costs Take a INR 1,00,000 balance at 3.6% a month, a minimum of 5% with a INR 200 floor, and no new spending. The [credit card minimum due calculator](/tools/credit-card-minimum-due-calculator) pays the minimum every month and counts how long it takes: INR 1,00,000 at 3.6% a month, paying only the minimum due After Balance left Paid so far Interest and GST so far 2 years INR 79,249 INR 1,07,587 INR 86,835 6 years INR 49,771 INR 2,60,416 INR 2,10,187 10 years INR 31,258 INR 3,56,398 INR 2,87,656 20 years INR 9,771 INR 4,67,801 INR 3,77,571 31 years 1 month INR 0 INR 5,05,831 INR 4,05,831 It takes **373 months**, over 31 years, and **INR 4,05,831** in interest and GST to clear a INR 1 lakh balance. After two full years of never missing a payment, you've paid more than the original balance and still owe INR 79,249. ## Why the balance barely moves Look at the first month. You pay the INR 5,000 minimum, leaving INR 95,000. Interest at 3.6% on that is INR 3,420, and GST adds INR 616. So of your INR 5,000, about **INR 4,036 goes to interest and GST**, and the balance falls by only about INR 964, to roughly INR 99,036. Then the second problem kicks in. The minimum is a percentage of a balance that is falling, so the payment shrinks too: INR 5,000 becomes INR 4,952, then INR 4,904, and so on. A shrinking payment chasing a balance that grows 4.2% a month (3.6% interest plus GST on it) is why the curve flattens out over decades. There's a third, quieter cost. While any balance is outstanding, **new purchases get no interest-free period**. Use the card for groceries while you're paying the minimum and those groceries start costing interest the day you buy them. See [how to read a credit card statement](/learn/how-to-read-a-credit-card-statement) for how the interest-free period works. ## The simplest fix: freeze the payment You don't need more money to change the outcome dramatically. You need to stop the payment from shrinking. Keep paying the first month's minimum, INR 5,000, every month until the balance is gone: Same balances, two ways of paying (3.6% a month) Balance Plan Time to clear Interest and GST INR 1,00,000 Minimum only 31 years 1 month INR 4,05,831 INR 1,00,000 Fixed INR 5,000 a month 3 years 5 months INR 1,02,813 INR 50,000 Minimum only 25 years 2 months INR 1,96,601 INR 50,000 Fixed INR 2,500 a month 3 years 5 months INR 51,406 On INR 1 lakh, fixing the payment at INR 5,000 saves **INR 3,03,018** and about 28 years. Anything above that saves more. If you can stretch to INR 8,000 or INR 10,000, put the [debt payoff calculator](/tools/debt-payoff-calculator) to work on your actual balances. ### Run your own numbers 1. **Find the balance.** Use the total amount due on your latest statement, not the minimum. 2. **Find the monthly rate.** It's in the card's most important terms and conditions, usually written as a monthly percentage. If the statement shows an annual rate, divide by 12. 3. **Check the minimum formula.** Most cards use about 5%; some use less, which makes the trap worse. 4. **Enter them in the calculator** and note the fixed monthly payment that clears the card in a time you can live with, ideally under three years. 5. **Change your autopay.** Many people set card autopay to "minimum amount due" years ago and forgot. Switch it to the total amount due, or to your fixed payoff amount, so the plan runs without willpower. ## Cheaper ways out Even a fixed payment means paying around 50% a year in compound interest. Moving the balance to a cheaper form of debt usually beats it: - **Convert the balance to a card EMI.** On INR 50,000 at 16% a year for 12 months with a 1% fee, the [credit card EMI calculator](/tools/credit-card-emi-calculator) shows a total extra cost of **INR 5,827** including GST. Revolving the same amount at 3.6% a month with the same payment would cost **INR 18,481**. - **A personal loan to clear it.** Usually cheaper than the card's revolving rate, and the fixed EMI ends on a known date. Compare the full cost, including the processing fee and GST. - **Savings you're holding at 7%.** Paying off a debt that costs over 40% with money earning 7% is the best return available to you. Keep a one-month buffer and use the rest. Each option has pitfalls, covered step by step in [how to get out of credit card debt](/learn/how-to-get-out-of-credit-card-debt). ## When paying the minimum is fine There's one case where paying only the minimum is reasonable: a genuine one-off cash crunch, such as a delayed salary, where you'll clear the full balance next month. You'll pay a month's interest, but you'll avoid a late fee and a missed-payment report. That's damage control, not a plan. If you've paid only the minimum for three months running, treat it as a debt problem rather than a cash-flow blip. Stop using the card, list what you owe and pick a payoff plan. ## What it does to your credit score Paying the minimum on time counts as an on-time payment, so it protects your repayment history. But a large balance keeps your **credit utilisation** high, and utilisation above about 30% of your limit can pull a score down. The [credit utilisation calculator](/tools/credit-utilization-calculator) shows how much you'd need to pay down to get under 30% across all your cards. [Free tool**Credit card minimum due calculator**Paying the minimum due keeps your card in good standing but barely touches the debt. See how long it would take and what it would cost.](/tools/credit-card-minimum-due-calculator)[Free tool**Credit card interest calculator**Pay anything less than the full bill and the interest-free period vanishes. See what carrying a balance adds to your next statement.](/tools/credit-card-interest-calculator)[Free tool**Credit card EMI calculator**Turning a large card purchase into EMIs is far cheaper than revolving it, but not free. See the full cost including the fee and GST.](/tools/credit-card-emi-calculator)[Free tool**Debt payoff calculator**Juggling a credit card, a personal loan and an app loan? See when you'll be debt-free and which order saves the most.](/tools/debt-payoff-calculator)[Free tool**Credit utilisation calculator**Your credit utilisation is how much of your card limits you're using. It is one of the factors in your credit score that you can change fastest.](/tools/credit-utilization-calculator) **Where Kosh fits** Kosh reads your card statements, shows the interest and GST you paid last month in rupees, and reminds you before each due date. It never asks for card numbers or OTPs. ## Frequently asked questions What happens if I pay only the minimum due on my credit card? You avoid a late fee and a missed-payment report, but interest of around 3 to 3.75% a month plus 18% GST is charged on the rest of the balance. Because the minimum shrinks as the balance falls, clearing INR 1 lakh this way at 3.6% a month takes over 31 years and costs about INR 4 lakh in interest and GST. How is the minimum amount due calculated? Most banks set it at about 5% of the outstanding balance, with a small floor such as INR 200, plus any card EMIs, fees, GST and over-limit amount due that month. The exact formula is in your card's most important terms and conditions. Does paying the minimum due hurt my credit score? Paying it on time counts as an on-time payment, which protects your repayment history. But the large balance left behind keeps your credit utilisation high, and that can lower your score. Is it better to pay a fixed amount instead of the minimum due? Yes. Keeping your payment fixed at today's minimum instead of letting it shrink clears a INR 1 lakh balance at 3.6% a month in about 3 years 5 months instead of 31 years, saving about INR 3 lakh in interest and GST. Do I get an interest-free period on new purchases while paying the minimum? No. While any balance is carried forward, new purchases attract interest from the day you make them. The interest-free period returns only after you clear the full outstanding balance. ## Sources - [Reserve Bank of India](https://www.rbi.org.in/) Written by the Kosh team and checked against the rules in force on 25 October 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting. ## Upload your statement and Kosh does this for you. Kosh reads your bank and card statements, works out your tax under both regimes and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-credit-card-minimum-due-trap)