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Yes, you will get charged with interest if you make the minimum credit card payment only. Paying the minimum amount required each month merely keeps your account in good standing, which saves you from credit score damage but not from interest charges. The only time you wouldn’t owe interest on a balance that remains after paying the minimum is during a card’s 0% introductory APR period. But without a 0% APR, you can only avoid interest if you pay off your entire balance in full by your due date.
Things to Know About Credit Card Minimum Payments
- A minimum payment is always required.
You must make the minimum payment every month or you’ll be charged a penalty fee. But it doesn’t protect you from interest. You owe interest on any balance you carry from month to month. - Your balance determines the minimum payment amount.
If your charges for the month are lower than the minimum payment, then the minimum payment becomes your full balance. But if you have a balance that carried over from a previous month, the normal minimum payment rules would apply. - You lose your grace period when you only make minimum payments.
Only paying off your balance in full by the due date will stop you from incurring interest charges. You’ll need to do so two months in a row to regain your grace period, which prevents interest from accruing on new purchases until after the due date. - Interest is assessed daily if you make the minimum payment only.
There’s a difference between your statement balance and current balance. Your statement balance is the full amount due, as of the end of your latest billing period. Your current balance includes purchases made since then. If you pay in full by the due date every month and your card has a grace period, interest won’t apply to those most recent purchases. If not, they’ll be assessed interest daily, along with the rest of your balance. - You have to make minimum payments on a 0% APR credit card.
If your card has a 0% introductory APR, you won’t owe any interest for a certain number of months. But you’ll still have to make your minimum payment every month. If you don’t, your issuer may end the 0% APR early and charge you at the regular rate.
If avoiding interest is your goal, choose your credit card wisely and strive to pay off your full balance every month. For more information, check out WalletHub’s guides on how credit card interest works and the credit card payment timeline.
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