1. What is Minimum Payment?

The minimum payment 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 1% of your balance plus any interest or fees.

2. How Does the Calculator Work?

The calculator uses the standard minimum payment formula:

Where:

• Balance — Your current credit card balance (USD)
• Interest — The interest charged for the current billing cycle (USD)

Explanation: This formula represents the most common minimum payment calculation method used by credit card issuers.

3. Importance of Minimum Payment

Details: While paying the minimum keeps your account current, it's important to pay more whenever possible to reduce interest costs and pay off debt faster.

4. Using the Calculator

Tips: Enter your current credit card balance and the interest charged for the current billing period. Both values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is the minimum payment the same for all credit cards?
A: No, some issuers may use slightly different formulas (e.g., 2% of balance or $25, whichever is greater).

Q2: What happens if I only pay the minimum?
A: You'll stay in good standing but will pay more interest overall and take much longer to pay off your balance.

Q3: How can I reduce my minimum payment?
A: Paying down your principal balance will reduce future minimum payments.

Q4: Does making minimum payments affect my credit score?
A: It keeps your account current, but high balances relative to your limit can hurt your credit utilization ratio.

Q5: Should I always pay more than the minimum?
A: Yes, whenever possible, to save on interest and pay off debt faster.