## 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 billing cycle of the credit card.

#### 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

### About Credit Card Minimum Payment Calculator

The formula for calculating Credit Card Minimum Payment is per below:

**(A * P) + I + L OR Minimum Fixed Amount in Dollars**

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

Wherein,

- 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

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 cycle of the credit card. If one is unable to pay by the due date at least the minimum amount, 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, then 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 in avoiding any late payment fees as well as interest.

### How to Calculate Using the Credit Card Minimum Payment Calculator?

One needs to follow the below steps in order to calculate the Minimum Payment.

**Determine the total spending made by the credit card holder in the given billing cycle of the credit card.****Multiply the amount arrived in step 1 by the rate, which is decided by the bank 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 fixed payment is decided by the bank.****Find out if any interest or late fees charges have been applied in the billing cycle.****Take the sum of the values arrived in step 3 and step 4, which shall be the total minimum amount due on the credit card for that billing cycle.**

### Example #1

Mr. X holds a corporate credit card for the last 5 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 late fee payment of $,10 and interest was applied to $160. In the last billing cycle, he spends around $55,000, which includes personal and official both spend. The Bank has fixed 5% as the minimum due amount, which shall be required to be pay by the credit card holder, and the amount cannot be less than $50.

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

**Solution:**

We are given the below details:

Sr No | Particulars | Amount |
---|---|---|

1 | Total Spendings | $55,000 |

2 | Minimum Rate | 5% |

3 | Interest | $160 |

4 | Late Fees Charges | $10 |

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

**Credit Card Minimum Payment = (A * P) + I + L**

- = ($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 total minimum due on the corporate credit card of Mr. X would be $2,920.

### Example #2

Miss Renuka is a young woman, and she 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 also makes her insurance payment by the same credit card for $800.

During the same billing cycle, she further spends on the movie for $15 and goes for 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 are required to calculate the total minimum amount due to the credit card holder by Miss Renuka.

**Solution:**

We are given the below details:

- Interest Charges as $0
- Late Payment Charges $0

Sr No | Particulars | Amount |
---|---|---|

1 | Shopping Mall Bill | $600 |

2 | Tea bill | $5 |

3 | Mobile Bill | $25 |

4 | Insurance Payment | $800 |

5 | Movie | $15 |

6 | Restaurant | $30 |

7 | Minimum Rate | 3% |

8 | Interest | – |

9 | Late Fee Charges | – |

The total amount of spending needs to be calculated per below:

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

**Credit Card Minimum Payment = (A * P) + I + L**

- = (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 the credit card of Miss Renuka would be $60.

### Conclusion

This calculator can be used to 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 they’re in between jobs.

In most of the cases, the minimum due would be more than the interest charges, and if one is only paying the minimum due each month, it would 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.

### Recommended Articles

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