What are Minimum Payments?
Minimum payments are part of the customer’s billing statement and this is defined as the smallest amount that the customer can pay in the given billing cycle. Minimum payments are usually determined by a certain percentage against the total amount due. These minimum payments are even lower than the monthly amount due and credit card holders who are short of cash usually opt to pay minimum payments instead of the monthly amount due. An example of how minimum payments are computed is as follows. For example, the credit card company charges an interest rate on minimum payments as 2.5%, and if the total outstanding balance on the credit card is $10,000 then the minimum amount due to prevent the account from being delinquent and accruing late fees is $250. Some credit card companies have a set minimum payment like $100 for example, or 2.5% of the total outstanding balance. The credit card holder will be charged whichever the higher amount is between these 2 figures. Minimum Payments or Mont
