Adam McCann, Financial Writer
You can see how the minimum payment on your credit card is calculated by looking at your monthly statement, which will list the minimum payment as well as the rules for determining it. A minimum payment is typically around 1% to 5% of your balance, depending on the issuer. Typically, you have to pay that percentage or a dollar amount of around $25 to $35, whichever is greater.
Once you know your minimum payment, you can use WalletHub’s free calculator to see how long it would take to pay off your entire balance using only minimum payments. And if you’d like to estimate your minimum payment before you get a statement, just check your balance online and then look at the card’s terms and conditions to see how the minimum is determined. Below is a general overview of how the process works.
How to Calculate the Minimum Payment on a Credit Card
- Check the balance on your card.
- Pull up your card’s terms and conditions to find out the minimum payment percentage as well as the minimum dollar amount for payments.
- If your balance is less than the minimum dollar amount stated by the issuer, pay your entire balance.
- If your balance is more than the minimum dollar amount stated by the issuer, multiply your balance by the minimum payment percentage stated by the issuer.
- Compare the result of step 4 (balance * min. payment percentage) to the issuer’s minimum dollar amount. Then, pay the greater of the two numbers.
You can learn more about credit card minimum payments on WalletHub.
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