{"id":1125,"date":"2020-07-25T01:14:43","date_gmt":"2020-07-24T21:14:43","guid":{"rendered":"https:\/\/moneymall.ae\/credit-blog\/?p=1125"},"modified":"2020-08-01T00:39:16","modified_gmt":"2020-07-31T20:39:16","slug":"minimum-amount-due-credit-card-payment","status":"publish","type":"post","link":"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/","title":{"rendered":"Minimum Amount Due : Is It Bad To Make Credit Card Payment of Minimum Due Only?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">If you only pay the minimum amount due on your credit card payment month after month, you will end up with a balance so high that you will find it extremely difficult to repay. Carrying a high credit card balance carries a number of risks from damage to your credit score to less access to your credit limit. <\/span><span style=\"font-weight: 400;\">Continue reading to know of the other harmful consequences of paying the minimum amount on a credit card&#8230;<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a234108ae156\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a234108ae156\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#What_is_a_Minimum_Amount_Due\" >What is a Minimum Amount Due?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#5_reasons_why_Credit_card_payment_of_the_minimum_amount_due_only_is_wrong\" >5 reasons why Credit card payment of the minimum amount due only is wrong<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Harms_your_credit_score\" >Harms your credit score<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Increase_in_charges\" >Increase in charges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Qualifying_criteria_for_credit_cards_and_loans\" >Qualifying criteria for credit cards and loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Debt_trap_becomes_real\" >Debt trap becomes real<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Lowers_the_available_credit\" >Lowers the available credit<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"What_is_a_Minimum_Amount_Due\"><\/span>What is a Minimum Amount Due?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Minimum\u00a0amount\u00a0due is the Lowest Credit Card payment amount you are must pay on or before the statement due date to maintain your credit card account. Generally in UAE, the minimum\u00a0amount\u00a0due is calculated as <strong>5%<\/strong> of your outstanding Credit Card Account balance each month-end, It is a very small portion of the principal outstanding every billing cycle on the credit card statement date.<\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_1167\" aria-describedby=\"caption-attachment-1167\" style=\"width: 385px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/moneymall.ae\/credit-blog\/why-paying-a-minimum-amount-on-a-credit-card-is-a-big-no\/timeline\/\" rel=\"attachment wp-att-1167\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-1167\" src=\"https:\/\/moneymall.ae\/credit-blog\/wp-content\/uploads\/2020\/07\/timeline.png\" alt=\"Credit Card Minimum Due\" width=\"385\" height=\"385\" \/><\/a><figcaption id=\"caption-attachment-1167\" class=\"wp-caption-text\">Credit Card Payment of Minimum Due<\/figcaption><\/figure>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a234108ae546\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a234108ae546\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#What_is_a_Minimum_Amount_Due\" >What is a Minimum Amount Due?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#5_reasons_why_Credit_card_payment_of_the_minimum_amount_due_only_is_wrong\" >5 reasons why Credit card payment of the minimum amount due only is wrong<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Harms_your_credit_score\" >Harms your credit score<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Increase_in_charges\" >Increase in charges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Qualifying_criteria_for_credit_cards_and_loans\" >Qualifying criteria for credit cards and loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Debt_trap_becomes_real\" >Debt trap becomes real<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/moneymall.ae\/credit-blog\/minimum-amount-due-credit-card-payment\/#Lowers_the_available_credit\" >Lowers the available credit<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<p style=\"text-align: center;\"><em><strong>Read More:-\u00a0\u00a0<a href=\"https:\/\/moneymall.ae\/credit-blog\/manage-credit-cards-in-dubai\/\">12 Smart Tips To Manage Credit Cards In Dubai For Personal Gain<\/a><\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_reasons_why_Credit_card_payment_of_the_minimum_amount_due_only_is_wrong\"><\/span><strong>5 reasons why Credit card payment of the minimum amount due only is wrong<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A credit card can at once be both a blessing and a curse. While it offers the convenience of cashless transactions, a cardholder must also bear the responsibility of using the piece of plastic in a careful and thrifty manner. With a credit card in hand, many consumers are tempted to spend more than they can pay off. Meanwhile, there are others who frequently max out their cards without realizing the negative effects of such actions. Here\u2019s what can happen if you get into the habit of only paying a minimum amount on your credit card:<\/span><\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Harms_your_credit_score\"><\/span><b>Harms your credit score<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">A maxed-out credit card (when your balance is right at the credit limit) is harmful to your credit score, which is the three-digit number that gauges your creditworthiness. Experts say that a high credit card balance could cause your credit score to drop more than 100 points, depending on the other information in your credit report. When the ratio of your credit card balance to the credit limit, i.e. your credit utilization, gets too high, your credit score suffers. It goes without saying, the higher your balance, the more your credit score suffers which means keeping a low balance is better for your credit score.<\/span><\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Increase_in_charges\"><\/span><b>Increase in charges<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Each month you do not pay your balance in full, you&#8217;ll be charged interest in the form of a finance charge. These monthly finance charges are calculated based on your credit card balance and your interest rate. The higher your balance, the higher your finance charges will be. Carrying a high credit card balance can cost hundreds of dirhams in a year, especially if you are only making minimum payments.<\/span><\/p>\n<p style=\"text-align: center;\"><em><strong>Read More:-\u00a0<a href=\"https:\/\/moneymall.ae\/credit-blog\/carrying-a-high-balance-credit-card-a-big-no-no\/\">Carrying A High Balance Credit Card? It&#8217;s A Big No-No<\/a><\/strong><\/em><\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Qualifying_criteria_for_credit_cards_and_loans\"><\/span><b>Qualifying criteria for credit cards and loans<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Among a few other factors, credit cards and lenders consider the amount of credit card debt you have when you apply for a new account. Carrying high balances on several credit cards could hint that you have more debt than you can handle, which causes creditors to question whether you can handle another debt obligation. Thus, the institution may turn down your application for a new loan altogether. Maintaining low balances makes you a more attractive borrower, which is particularly important if you&#8217;re preparing to apply for a mortgage or auto loan.<\/span><\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Debt_trap_becomes_real\"><\/span><b>Debt trap becomes real<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Consistently paying no more than the minimum amount and carrying a high balance could lead to a situation where you have borrowed more than you can pay off. Debt happens when you repeatedly borrow more money than you are willing to pay pack. Having a high credit card balance, especially on more than one credit card, doesn\u2019t help your debt situation. Keep your balances low, or paid off even, to avoid being in debt.<\/span><\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Lowers_the_available_credit\"><\/span><b>Lowers the available credit<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">One of the boons of a credit card is that you can use it to borrow money for various purposes, like funding your business or for emergencies such as hospitalization. But if you only pay minimum amounts and are already carrying a high balance, you may not be able to use your card for that particular need. With all transactions, the credit card issuer will place an authorization hold on a portion of your funds. If a high balance leaves you without enough available credit, you will have to reduce your balance, use another card, or, worse, cancel your expense altogether. So, paying your payments in full and having a credit card with a low balance helps you avoid having this issue.<\/span><\/p>\n<p style=\"text-align: center;\"><em><strong>Read More:-\u00a0<a href=\"https:\/\/moneymall.ae\/credit-blog\/5-balance-transfer-credit-cards\/\">6 Best Balance Transfer Credit Cards in UAE for July 2020<\/a><\/strong><\/em><\/p>\n<p><span style=\"font-weight: 400;\">It is often mistakenly believed that making the minimum payment on your card dues is sufficient. To avoid penalties, you must pay your bill on time. But to avoid heavy interest rates, you must also pay the bill in full. Don\u2019t pay attention to the minimum dues, and make it a point to clear your full card balance every month. A history of late payments and other delinquent behavior can have a strong negative effect on your credit score and overall financial status for many years. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">To avoid missing your due date, set a reminder on your phone a few days beforehand or mark the date on your calendar. You can also adjust your online account settings to always automatically pay at least the minimum required amount each month. Or, better yet, set up automatic payments to pay the full new statement balance each month. <\/span><span style=\"font-weight: 400;\">To avoid heavy interest rates, you must pay the bill in full.<\/span><span style=\"font-weight: 400;\"> This can help you both stay out of credit card debt and avoid interest completely with most cards.<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you only pay the minimum amount due on your credit card payment month after month, you will end up [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":1167,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[2,76],"tags":[42,357,358],"class_list":["post-1125","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-credit-cards","category-banking-terms-dictionary","tag-credit-card-payment","tag-minimum-amount-on-credit-cards","tag-minimum-due"],"_links":{"self":[{"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/posts\/1125","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/comments?post=1125"}],"version-history":[{"count":11,"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/posts\/1125\/revisions"}],"predecessor-version":[{"id":1246,"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/posts\/1125\/revisions\/1246"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/media\/1167"}],"wp:attachment":[{"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/media?parent=1125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/categories?post=1125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/moneymall.ae\/credit-blog\/wp-json\/wp\/v2\/tags?post=1125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}