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What is the Minimum Payment on a Credit Card?

Last Updated: September 12, 2023
2 min read

Table of contents

Key points about: minimum credit card payments

  1. Your minimum payment is the lowest amount you must pay toward your monthly credit card statement balance in order to keep your account current.

  2. If you don’t make your minimum payment on time, your card issuer may charge a late fee and penalty interest.

  3. Setting up automatic payments and text or email alerts can help you pay your minimum payment on time each month.

Learn about credit card minimum payments

Your monthly credit card statement is full of important information; a number worth paying particular attention to is your minimum payment amount. The minimum payment on a credit card represents the smallest amount you must pay toward your monthly statement balance to keep your account current. Let’s look at why your minimum payment is an essential part of your debt management.

Minimum payment vs. statement balance

Your monthly credit card statements include your minimum payment amount and your statement balance, which is the total outstanding charges on your account as of the day your billing cycle ends.

Most card issuers only require you to pay your minimum payment on or before your payment due date each month to keep your account current. However, your statement balance is the amount you must pay to avoid paying interest; if you only make the minimum payment due, you’ll pay interest on the balance you carry past the due date if you are not enrolled in a 0% interest rate.

Your credit card statement should also include a minimum payment disclosure explaining how long it may take to pay off your statement balance when only making the minimum payments. You can use the Discover credit card interest calculator to see what interest you’ll owe on any credit card balance and how increasing your monthly payments may help you pay your debt down sooner. 

How is your minimum payment calculated?

When you open a credit card account, you agree to specific payment terms, including making a minimum monthly payment toward your balance. Typically, a borrower’s minimum payment is not a set amount but a percentage of the statement balance, often plus interest and applicable fees. This means your minimum payment can change based on what you owe. Review your credit card’s terms and conditions to understand how your credit issuer calculates your minimum payment.

What if your minimum payment is late?

Unfortunately, there are consequences for a late credit card payment. For example, late payments can negatively impact your credit score.

Did you know?

A card issuer may charge a late fee for payments made after the payment due date. Some credit card companies may also impose a penalty interest rate that’s higher than your purchase interest rate. But Discover offers late payment forgiveness for your first late payment.

See if you’re pre-approved

According to the Consumer Financial Protection Bureau, late fees can’t exceed the minimum amount due, but late fees can increase, especially if a borrower is late on payments more than twice within a short span of time.

Need help making your minimum payments on time? Consider setting up automatic monthly payments or using text and email alerts to notify you when your payment is due. 

Your credit card minimum payment is a number you need to know. And understanding the role it plays in your borrowing can help you successfully handle your credit card account.


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