The minimum payment on a 0% APR credit card is usually 1 percent of the total balance. Of the top 10 major credit card issuers, only Discover charges 2 percent of the total balance. Once an introductory 0% APR period ends, the minimum payment will increase to include any interest charges added to the total balance since the last statement date.
How much you owe can also determine your minimum payment on a 0% APR credit card. The 1% or 2% rate usually applies if you have a sizeable balance, generally $1,000 or more. If your balance is less than the $1,000, you’ll pay a fixed floor rate, usually around $25 for minimum payments. The fixed rate varies by card. If you have a very small balance, less than $25, for example, your minimum payment will be the full balance.
There are other factors that can affect the minimum payment on a 0% APR credit card. If you pay late or exceed your credit limit, for example, your minimum payment will be adjusted. It will include any unpaid minimum payment, amount over the credit limit and related fees. If these occur during the 0% APR period, an issuer may also cancel the 0% interest rate and begin charging the regular APR.
Here is what you should know about the minimum payment on 0% APR credit card:
- A minimum credit card payment is the lowest amount you’re obligated to pay each billing cycle in order to keep your account current.
- Most major credit card issuers require a minimum payment equal to 1% of the total balance. Discover charges 2%.
- When a 0% APR period expires, minimum payments will increase to include any interest charges added to the total balance since your last billing cycle.
- You can find your minimum payment on your credit card statement. It is also available on your online account or in the introductory pamphlet included with your new card. You can also call customer service at the number on the back of your card to inquire.
- Minimum payments can be determined by how much you owe. The 1% - 2% rate usually applies to higher balances ($1,000 and more). A minimum payment floor (usually around $25) often applies to balances less than $1,000.
- Usually, if you have a balance of less than $25, the full balance is the minimum payment.
- An issuer may also cancel the 0% interest rate and begin charging the regular APR if you pay late, exceed your credit limit or fail to make the minimum payment. Your minimum payment will be adjusted to include any outstanding minimum payment, over limit amounts or any related fees.
Don’t assume that a 0% APR means you don’t have to pay anything at all. You are required to pay the minimum every month; you just won’t owe interest during the 0% period. And you should always try to pay significantly more than the minimum amount due on a 0% APR credit card. You want to pay off the entire debt before the introductory rate expires and the regular APR kicks in. Any missed payments or payments less than the minimum amount will likely lead to the 0% APR being cancelled.
If you’re transferring a balance or financing a big purchase, divide the balance by the number of months the 0% promotion lasts. This will help you get a rough estimate of how much you should pay each month. Better still, divide the balance by one less month than you have on your promotion to make absolutely sure no balance remains at the end.