A minimum payment is one of the most important terms and conditions on credit cards. Whenever you’re unable to pay your balance in full, you can avoid penalties and fees by making minimum payments. Keeping your account in good standing if times get tough can also help you avoid penalties or fees.
How the minimum payment are calculated on a credit card
In most cases, credit card minimum payments are calculated based on the balance on the statement.
Depending on the credit card company, the minimum payment may be a percentage of the balance, plus interest and late fees, or it may be a flat percentage of the whole balance, and past-due amounts may be included in the minimum payment.
Check the terms and conditions of your account to see how your minimum payment is calculated.
Payment Calculations and Consumer Rights
It is necessary to read the fine print in your cardmember agreement to understand how that minimum payment is calculated, but at least you will know why the payment fluctuates. The consequences of making a minimum payment can be clearly explained on your credit card statement, along with how long it will take you to repay your debt and what interest expenses you will incur.
If you want to improve your financial position by using the information wisely which can help you manage your credit card debt.
