Minimum payment

How it works

Each statement lists the minimum payment and the date it is due. Paying at least that much on time is all the account requires for that cycle, but it does not stop interest on the rest of the balance. When payments stay near the minimum, much of each one can go to interest, so the balance may shrink slowly while the total cost climbs.

Credit card statements generally include a section headed “Minimum Payment Warning.” It estimates how long paying only the minimum would take to clear the current balance and what that would cost in total, assuming nothing else is added. It often also shows the monthly payment that would clear the balance in 36 months and how much that could save compared with paying the minimum.

Paying only the minimum is different from missing it. The statement also lists the late fee and any higher penalty rate that could apply if the minimum payment arrives late. Paying less than the minimum, or paying after the due date, can bring those charges under the card’s terms.

Related terms

Sources and further reading

• CFPB: The 36-month payoff box on a credit card bill
• CFPB: Periodic statement rules, including the minimum payment warning

Examples are illustrative and focus on U.S. personal finance. This page is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.