Loans & Credit

What Is a Credit Card Minimum Payment?

A minimum payment is the smallest amount a cardholder must pay by the due date to keep a credit card account in good standing. It is often a small percentage of the balance plus interest and fees, or a fixed floor amount. Paying only the minimum keeps the account current but leaves most of the balance to accrue interest.

How It Is Calculated

Card issuers set their own formulas, commonly 1%–3% of the balance plus that month's interest and fees, with a minimum floor amount. The exact method appears in the cardholder agreement.

Why Payoff Takes Long at the Minimum

As the balance falls, a percentage-based minimum falls too, so progress slows over time. That is why paying only the minimum can stretch repayment over many years and increase total interest significantly.

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🔗 Related Terms

Credit Utilization Ratio APR (Annual Percentage Rate) Debt Avalanche Method Debt Snowball Method

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.