Paying Only the Minimum Due Can Keep You in Debt Much Longer

A credit-card bill of ₹35,000 can feel difficult to manage. When the application shows a minimum amount due of a much smaller amount, paying it may seem like a practical solution. The minimum payment can prevent the bill from being treated immediately as unpaid, subject to the card terms. It does not clear the remaining balance. Interest may continue on the unpaid amount. When this happens for several months, a purchase that originally appeared affordable can become much more expensive. The Reserve Bank of India requires card issuers to explain the effect of paying only the minimum amount due. Issuers must also disclose applicable annualised interest rates and explain how finance charges are calculated. RBI specifically warns that repeated minimum payments can stretch repayment over months or years and increase the interest paid. Before paying, read three numbers on the statement carefully. Check the total amount due, the minimum amount due and the applicable interest rate or finance charge. Also review whether an unpaid previous balance affects the interest-free period for new purchases. The exact treatment depends on the issuer’s terms. When full repayment is not possible, stop adding unnecessary new purchases to the same card. Work out how much you can pay every month without missing rent, food, utilities or other essential commitments. Do not use another high-cost loan simply to hide the existing balance. Compare the total cost, repayment period and charges before changing one debt into another. The minimum amount due is a temporary payment option. It should not be treated as the normal monthly cost of using a credit card.