15+ Unique Ways How Are Credit Card Minimum Payments Calculated

Credit Card Issuers Typically Calculate The Monthly Minimum Payment In One Of Two Ways:

Credit card minimum payments are usually calculated based on your monthly balance. Using this rubric, the minimum payment on a $2,000 balance that accrued $20 in finance charges and no late fees would be ($2,000 x 0.01) + $20 = $40. This amount might include late fees if you’ve missed.

How A Minimum Payment Is Calculated Can.

Compare rates by card type. Usually, the way your minimum payment is calculated depends on your credit card balance. A lender's rule might say something like:

First, You Determine The Percentage Of Your Balance.

Calculating the true cost of credit card minimum payments. Remember, that assumes you only make. The minimum payment could be a percentage of your balance, plus new interest and late fees.

To Find That Answer, Multiply $7,000 By.03 (Which Is The Same As 3%—Learn More About Converting Percentages And Decimals ).

If your balance is less than a certain number, typically $25 or $35, your statement asks you to pay in full. This is the amount you owe on your credit card. Here’s an example of how the minimum payment calculation might be written in typical credit card terms:

Otherwise, Your Creditor Might Charge A Small Percentage Of Your Balance Or A Flat Fee Like $25—Whichever Is More.

Now, let’s say you have $160 in total interest and $40 in late fees. To determine your minimum monthly payment, the credit card company takes your statement balance and multiplies it by a flat percentage — typically 1% to 3%. For example, if your balance is more than $1,000, your minimum payment is calculated by multiplying your balance by 2%.