Credit Card Minimum Due: A Path to Massive Debt

• The "Minimum Due Payment" feature on credit cards, often perceived as safe, can lead to significant debt.
• Paying only the minimum due (typically 5% of the bill) leaves a large outstanding balance subject to high annual interest rates (36-45%).
• This practice can trap cardholders in a cycle where their total outstanding debt increases despite regular payments.
• Banks profit significantly from the interest accrued on uncleared balances when only the minimum due is paid.
• Consistently paying only the minimum due can negatively impact CIBIL scores and future loan eligibility due to high credit utilization.

Why It Matters: Minimum credit card payments hide a debt trap, harming your financial future.