What happens if i only pay the minimum payment on my credit card?

Besides setting a definite minimum payment, there are two prevailing techniques applied by credit card issuers to calculate monthly minimum payments.

Method 1: Flat percentage

In this case, the credit card issuer computes the minimum payment as a percentage of your total statement balance, usually around one to three percent.

For example, if the flat percentage is , and your statement balance is , the minimum payment is 10 dollars ().

Method 2: Percentage plus interest

Some credit card issuers set your minimum payment by computing the percentage of your statement balance and adding the interest and fees charged during the statement period.

Considering the previous example with a 20 dollar monthly interest charge and a 30 dollar late fee, you can compute the minimum payment in the following way:

Note that the percentage method applies exclusively when the resulting amount is larger than the defined minimum payment.

For example, if you have a small statement balance, say 100 dollars, the minimum payment with a flat percentage me

how is credit card minimum payment calculated discover

how is your credit card minimum payment calculated