Minimum Amount Due (MAD) is a small fraction of the total outstanding amount that you can pay in case you are not able to make full payments. When to pay minimum amount due

  • MAD is the amount that you pay to the concerned credit card company on or before the due date to keep your credit card active and to keep the card account operative.
  • Making the minimum amount due Payment will ensure that you will have to pay only the interest when required. There will be no penalty or late payment charges.
  • Your credit card issuing bank will not report you as irregular to credit bureau if you make minimum amount due Payments on time.


Cons of paying only the minimum amount due

  • You will not be offered any interest free credit period if you have paid only the minimum amount due and not the credit card outstanding in full. Rather, you will be charged interest amount from the date of purchase.
  • The interest amount will also keep accumulating till you settle the dues. So, even if you have paid the minimum amount due and have avoided paying any penalty for late payment, you will not be able to enjoy the benefits of interest free credit period.


Calculation of Minimum Amount Due

As is the case with many credit card companies, the minimum amount due is generally 5% of the balance outstanding as calculated on statement date. If you have converted your purchases to EMI or if you have enabled the EMI balance transfer option, the same will also be added to your minimum amount due. Also, if there are any unpaid minimum amount from the previous credit card statement cycle, it will also be added to the minimum due for current month.

In conclusion, you will have to cut down on expenses and revisit your budget if you constantly find yourself being able to pay only the Minimum Due amount. In case the credit card interest has become too much to bear, you can try personal loans or balance transfer options.



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