Minimum Payment Calculator on Credit Card

Credit Card Minimum Payment Calculator can be used to calculate the minimum amount that shall be required to be paid by the credit card holder at every end of the credit card billing cycle.

About Credit Card Minimum Payment Calculator

The formula for calculating Credit Card Minimum Payment is below:

Credit Card Minimum Payment Calculator

(A x P) + I + L

  • A is the total amount spend in a billing cycle
  • I is the Interest if any applicable
  • L is the Late fees charges
  • P is the percentage or rate

Whichever is the higher amount would be the minimum payment on the credit card

Wherein,

  • A is the total amount spent in a billing cycleI is the Interest if any applicableL is the Late fees chargesP is the percentage or rate

A minimum payment on the credit card would mean that what is the bare minimum amount that one would be obligated contractually to pay each billing cycleBilling CycleThe billing cycle is the time period between one billing statement and the next billing date that companies generate for its services and products sold to the customers. The cycle could be monthly, quarterly or even annually. read more of the credit card? If one cannot pay at least the minimum amount by the due date, then the credit card holder could be charged with a penalty APR (annual percentage rate) or late fee. After thirty days, if the credit card holder doesn’t pay at least the minimum due amount, the account could be reported as delinquent, and further, the credit score will also take a hit.

Hence, it becomes necessary for the credit card holder to know what the minimum amount shall be due, which shall help him avoid any late payment fees and interest.

How to Calculate Using the Credit Card Minimum Payment Calculator?

Example #1

Mr. X has held a corporate credit card for the last five years. He has been fulfilling his payments by claiming a reimbursement in time. But since the policy has changed and since then, some of the payments were not made in time, and he was charged with a late fee payment of $ 10, and interest was applied to $160. In the last billing cycle, he spent around $55,000, which includes both personal and official expenses. The Bank has fixed 5% as the minimum due amount, which shall be required to be paid by the credit card holder, and the amount cannot be less than $50.

  • Determine the total spending made by the credit card holder in the given billing cycle of the credit card. Multiply the amount arrived at in step 1 by the rate, which the bank decides as the minimum payment percentage. Compare the amount arrived in step 2 to the minimum fixed payment set up by the bank, and if it is less than that, then that amount shall be the minimum amount due, or else the bank decides the fixed payment. Find out if any interest or late fee charges have been applied in the billing cycle. Take the sum of the values in steps three and 4, which shall be the total minimum amount due on the credit card for that billing cycle.

Based on the given information, you must calculate the total minimum amount due on this corporate credit card.

Solution:

We are given the below details:

Now, we can use the below formula to calculate the total minimum amount due on this corporate credit card.

  • = ($55,000 * 5%) + $160 + $10= $2,920.

The above amount should be more than $50, or else $50 would be the minimum payment.

Therefore, the minimum due on their corporate credit card, Mr. X, would be $2,920.

Example #2

Miss Renuka is a young woman who has a hobby of shopping. She just received her new amazon IDIDI credit card and is enthusiastic about starting using it. She has already created a list of which she wants to do the shopping. First, she swipes the credit card at a shopping mall wherein she purchases a dress for $600 and drinks tea at the mall for $5. She also uses the card to recharge her mobile cell bill for $25 and makes her insurance payment by the same credit card for $800.

During the same billing cycle, she spends on the movie $15 and goes to a fine dining restaurant wherein she spends $30. The bank has fixed 3% as the minimum amount due, and the amount cannot be less than $60.

Based on the given information, you must calculate the total minimum amount due to the credit card holder by Miss Renuka.

  • Interest Charges as $0Late Payment Charges $0

The total amount of spending needs to be calculated below:

Now, we can use the below formula to calculate the total minimum amount due on this credit card.

  • = (1,475 * 3%) + 0 + 0= $44.25

The above amount should be more than $60, or else $60 would be the minimum payment.

Therefore, the total minimum due to their credit card Miss Renuka would be $60.

Conclusion

This calculator can calculate the minimum amount due on the credit card; that shall be useful if the credit card holder is a little short of income in a particular billing cycle — for example when they had recently very large expenses or were in between jobs.

In most cases, the minimum due would be more than the interest charges. If one is only paying the minimum due each month, it will take decades and years to complete the payment, or further, it could send a red alert to lenders that the credit card holder might be struggling to repay the debt.

This has been a guide to the Credit Card Minimum Payment Calculator. Here we provide you with some examples of the calculator used to calculate the Credit Card Minimum Payment done by the credit card holder. You may also take a look at the following useful articles –

  • Secured vs Unsecured Credit CardCalculator of Loan RepaymentCalculator of Auto RefinanceCalculator for Balloon MortgageLife Expectancy Calculator