If you pay the minimum credit card payment only, you do get charged interest. Paying the minimum amount required each month merely keeps your account in good standing, which saves you from credit score damage but not 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.
Here’s why you get charged interest if you pay the minimum payment only:
Your minimum payment is always required. You must pay it 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.
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.
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.
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.
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.
Of course you do. The minimum payment is exactly that: minimum. You're paying enough to not get late fees, but you're not really taking much off your balance.
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