Lesson 13 of 28 · The minimum due trap · 3 min read · Reviewed 15 Oct 2026
Cards charge about 3.5% to 3.75% a month on unpaid balances, over 40% a year, plus 18% GST on the interest. Paying only the 5% minimum on a ₹1 lakh balance takes decades to clear and costs more than ₹5 lakh in interest.
If you pay the full bill by the due date, a card costs nothing. Pay less, even by a little, and interest starts on the whole balance and on new purchases.
The minimum due is set so the account stays current, not so the debt goes away. Most of it pays interest.
Key idea: Paying the full amount, every month, is the only way a card stays free.
Try the calculator and the one-question quiz on this page to check your own numbers.
Paying at least the minimum avoids a late payment mark. A high balance compared with your limit can still lower your score.
Stop new spending on the card, then clear it with savings or a cheaper personal loan. A loan at 14% costs far less than a card at over 40%.
Card EMIs charge a lower rate than revolving credit, but often add a processing fee and GST. Check the full cost before converting.
For learning only, not investment advice. Designed and built by people who have worked at India’s leading wealth management firms.