1. What is Minimum Due?

The minimum due is the smallest amount you must pay on your credit card each month to keep your account in good standing. It's typically calculated as the greater of a percentage of your balance or a fixed amount.

2. How Does the Calculator Work?

The calculator uses the minimum due formula:

Where:

• \( \text{balance} \) — Current credit card balance
• \( \text{percentage} \) — Percentage of balance required (e.g., 2%)
• \( \text{fixed amount} \) — Minimum fixed payment required

Explanation: The calculation ensures you pay at least the fixed amount or the percentage of your balance, whichever is greater.

3. Importance of Minimum Due Calculation

Details: Paying only the minimum due keeps your account current but results in interest charges. Understanding how it's calculated helps with financial planning.

4. Using the Calculator

Tips: Enter your current balance, the percentage your card issuer uses (typically 1-3%), and the fixed minimum amount (often $25-$35). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why do credit cards have minimum payments?
A: Minimum payments ensure cardholders make regular payments while maintaining flexibility, though paying only the minimum increases interest costs.

Q2: What's a typical minimum payment percentage?
A: Most cards use 1-3% of the balance, often with a minimum fixed amount (e.g., $25 or 1% of balance, whichever is greater).

Q3: Is paying only the minimum due bad?
A: While it keeps your account in good standing, it leads to higher interest costs and longer repayment periods.

Q4: Can the minimum payment change?
A: Yes, it changes with your balance and if the card issuer modifies terms (with notice).

Q5: How does this affect my credit score?
A: Paying at least the minimum on time helps your score, but high balances relative to your limit can hurt it.