Credit Card Minimum Payments Explained

How do minimum payments work on your credit card?
Need a new credit card? Visit creditcards.com and be responsible 😎: bit.ly/CashBack_HF
(click "show more" to see ad disclosure)
I'll explain how minimum payments work on your credit cards. They all have different rules and guidelines, but in general you can expect to pay about 1-3% of your total balance as a minimum payment and this payment will include interest and any fees. You will not pay off your balance quickly if you choose the minimum payment. If it's your only choice, pay it, but please try and pay extra if you can. Credit card interest is typically very expensive, so it's always best to avoid it if you can. Enjoy the video.
---------------
Robinhood Free Stock (Up to $200) with Sign Up:
► bit.ly/hf_robi...
Webull Up to 12 Free Fracional Shares (Each $3-$3,000):
► bit.ly/hf_webull
M1 Finance (perfect for IRA's):
► bit.ly/hf_M1_F...
Instagram:
► / honestfinance
Advertiser Disclosure: Honest Finance participates in affiliate sales networks and may receive compensation by clicking through the links (at no cost to you). This compensation may impact how and where links appear in this description. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This channel does not include all financial companies or all available financial offers.
---------------
Honest Finance covers a broad range of financial topics that'll give your life and finances more value. Subscribe today for future content and be sure to give this video a like!
Disclaimer: I am not a financial advisor. These videos are for education/entertainment purposes only. Investing of any kind involves risk, so please conduct your own research.
#honestfinance #creditcards

[@HonestFinance]

I hope this video helps you understand credit card minimum payments a bit more. Watch more credit card videos: kzbin.info/www/bejne/lXnJiZmBgb6JbJo

[@mercedeswilkins9085]

Remember a perfect credit score 800-850 doesn’t mean anything if you don’t have the payment history to back it.

[@admperry1]

I'm surprised people don't know this..especially when most companies warn you as you make your payment. Unfortunately, right now a minimum payment is all we can afford right now...AS your explanation states in this video. 👍

[@toonce101]

I'm 26 and have always been hesitant to start credit cards! Now I realize credit cards are not scary if you're financially responsible, which I am 🙂 I ordered a credit card today to begin working on my credit score. Thank you for the tips.

[@HonestFinance]

Good luck w the new card!!

[@Kaiyats]

All it takes is for your life to go upside down, you lose your job, you need to eat debt piles up fast

[@IzahBlack]

@@Kaiyatsthat’s why you build a savings to fall back on to

[@SalsaHuevos]

I thought he had a durag on 🤣💀

[@HonestFinance]

I’m laughing so hard right now. This is one of the funniest comments ever.

[@SalsaHuevos]

@ISayThingsToPissYouOffToShowHowLameYouAre.🤣 🤣🤣🤣

[@SalsaHuevos]

@@HonestFinance hahaaa thanks!!

[@CrystalJanelleTV]

Me too 😂🤣

[@SalsaHuevos]

@@CrystalJanelleTV lmao had me shook at first

[@lianalonge1984]

For those who think people already know this, there wouldn’t be $925 billion in credit card debt as reported by Forbes on November 29, 2022. I just had my young cousin to watch his video because she was approved for her first credit card. I told her treat your credit card like a debit card . . . DON’T use the card unless you have the cash to pay off your balance before the due date!

[@HonestFinance]

Great point!! Sometimes I feel like everybody understands, but a lot don’t or they’re younger and getting started

[@lianalonge1984]

@@HonestFinance indeed. Thanks for the video!

[@Charlesmarcel-ee4ke]

Credit card companies and banks love to see you will a balance it’s okay it take years to get a perfect over 750 credit score alot of people have over 20 years of history and only have 5 cards they all had a 1700 balance that was not paid in full pay down the small amount first then chip down the big amount 💳💳💳💳💳😁👍

[@3107SatoPandaxSamurai]

honestly the minimum payment amount doesnt matter whether it increases or decreases , as long as you pay the full amount every month on time or early before the due date ( choice) then youll be fine

[@HonestFinance]

Correct, thanks for commenting

[@kimberleypuddicombe6168]

Ok so when you pay the min balance on or before the due date does the statement balance get updated 😮😊😮

[@kimberleypuddicombe6168]

So when do u start to see the balance go down

[@ReaveIdono]

Minimum payments only really exist to not destroy your credit imo. I try to play at least 2-3x the minimum payment to get it down fast.

[@geckogal1024]

i'm 600 dollars in credit card debt rn because of some poor spending habits brought on by seeing my credit line go up😭 as soon as i get my financial aid refund i'm paying this off ASAP. i never want to be in this predicament again

[@qweenzee3318]

omg this!!! i’m in college so i was using it for that

[@dylanbray7689]

I just got my credit card and there was a promotion that there will be no interest on the card for 12 months. Taking full advantage of that to pay off some expensive items I’ve purchased, but making sure I’m still in the habit of paying a little above the minimum when I have too. Great info to remember tho 👌🏻.

[@thefreshest.2617]

Who cares

[@Gearsandco]

I always try to pay my card in full at the end of the month If I can't I usually pay in big chunks per example if my balance is 1000 I go 4 payment of 250$ this way I would pay it faster and lower the risk of paying too much interest.

[@JeffreyGillespie]

The fact that this kind of succinct information on credit card usage is so hard to find, but credit cards are so easy to get should give you some idea of why so many Americans are in debt up to their eyeballs.

[@harvey4337]

I’ve had people tell me that paying a bit more than the minimum is best and better than paying in full, I’m at a crossroads and I’m just starting with a 300 credit line

[@HonestFinance]

This is not good advice. Pay the statement balance in full every month to avoid interest charges

[@yung_sly4149]

⁠@@HonestFinanceI have a card with 0% intro apr for the first 21 months so does it not matter for me ?

[@HonestFinance]

@yung_sly4149 For now you’re good to pay the minimum , but pay it all off before the 0% ends

[@krystlejane]

Yikes 😬 didn’t realize they can change apr thanks for the insight!

[@jesseperez1907]

That's what APR means. Annual percentage rate. It is very rare to find a fixed rate credit card, if they still exist.

[@Joshualibbyy]

@@jesseperez1907 some cards actually still do. Applied bank does

[@jakefield9942]

If we pay only the minimum for one month and pay off the full statement like a week after do you lose credit score or anything

[@jesuscares4u261]

Thank you for explaining everything in this video. Just got my credit card this year and I was very confused because my minimum payment every month goes up high. Thank you for sharing this knowledge now I'm going to stop using my credit card until I paid it off. I'm thinking about cancelling it.

[@HonestFinance]

Glad the video helped

[@eliashernandez1391]

I agree you should always make your minimum payment but that being said you should pay in full if if you can comfortably. Remember to use your credit card they got to make money too sometimes so there's no shame in pain your minimum plus your interest your card will eventually trickle down yeah you're paying interest on that credit card but remember you have the privilege and access to that money that's the whole point of having a credit card

[@twinklekeller608]

Very well said. I've been to paying my debt and now almost done. I have new credit card and because of your advice that is honest, simple way, great advice, will apply it. Thank you so much for your help🙏🙏🙏 subscribe too to your channel.☺️😊🥳

[@HonestFinance]

I’m glad the videos have helped

[@s1s2233]

Thank you. This video is really simple and informative. :) Keep up the good work

[@gokaury]

Let's say I have a $200 minimum payment on my new monthly statement. If I pay in $50 increments each week for 4 weeks, will those weekly payments add up to the $200 minimum? Or do I have to pay the $200 in one lump sum for it to be counted as the minimum? If the answer to the first question is yes, I do plan on paying more each week in order to pay more than the minimum. I just need to know if this is the case so I can satisfy the minimum payment requirement.

[@ashcelebi9301]

yes, but those individual payments shouldn't reach the date after your due date.

[@Reciprocation_of_goodwill]

Thank you good sir, I'm young and I've never been taught such things.

[@yendothegamer9880]

If you have good credit just do balance transfer for 18 months free 0% APR

[@dr.mohamedaitnouh4501]

Very nice explanation! I would still need clarification about the formula they use. Is it (Annual Rate)x Balance /12? We know this, but this confirms it! Unfortunately, I lost my job and had to use credit cards sucks! Credit cards can save you. I really thank all of them.

[@SeanMillea]

Thank you

[@HonestFinance]

You’re welcome

[@Gospeed777]

I've herd you should pay 95 percent by the statement date then the other 5 by the min day so that the credit utilization is reported. Thoughts?

[@HonestFinance]

Yes it’ll help. Here’s a video exposing it. kzbin.info/www/bejne/iZ3KdqWcnNeSedk

[@gavinkaufmanworld]

Great video - really helpful 😁 Thanks for sharing ✨

[@HonestFinance]

Glad it helped!

[@esteylonmartinez6142]

Hey buddy! Such a great video ,straight to the point and valuable information. Could you help me with an important question please. For a few years now I've been paying my credit card in full months after months a week before due date, my credit score is excellent, but I am currently struggling financially and am able to only pay 1/3 or so of my total amount. It will be more than my minimum due balance, but I'm still afraid since its not the full amount that I am accustomed to paying that it will negatively impact my credit score. Is this the case?

[@HonestFinance]

It could impact your score if the balance you carry is more than 30% of your total limit

[@sm0983]

What if you use a credit card with 0% interest for 12 months ,for example, howd that work with minimum payments

[@snailnoodle]

No idea if you'll see this, but I'm having some trouble... I'm looking to spend at least $210 and my credit limit is $500. If I only use $210, do I need to pay back the full $500 before the due date or do I just pay back the $210?

[@medcastrophilip544]

I think you only pay what you used

[@joshuaolowe2665]

Very useful thank you man 🤝

[@HonestFinance]

You’re welcome

[@yaritzaserna3866]

Thanks for the info!

[@HonestFinance]

You’re welcome

[@markroth5129]

Thank you for the insight

[@stickedupent1837]

I had a current balance of 545 for the month of December paid it off in full at the end of the month , this month i paid 148$ in full , I realized i had a statement balance of 545? How could that be if i paid that balance in full for the month of December ? Anything im missing doing wrong? I called my bank and was told i dont owe anything but i still see the statement balance?

[@HonestFinance]

Because it was probably calculated after the statement closed. It’s happened to me too and it’s confusing

[@themichael3105]

Great vid. Thanks!

[@HonestFinance]

You’re welcome

[@oldschoolgamer6427]

Can you request with your bank to lower your minimum payment?

[@lcriveralcr1627]

I have capital one secured card my limit is 300 my minimum payment is on June 16 and the due date is on the July 11 I’m keeping my utilization low but I’m confused it says your statement closing date is atleast 20 or so days from the due date I counted that from July 11 to June 16 it’s about a 20 day gap I paid my card down from the minimum payment date because I thought that day was when my info gets reported to the credit bureau so I paid it down for it to be around 10% and my due date is until July 11 which is only 25$ am I doing this wrong some videos say one thing and another other I’m confused this is my first card .

[@dohrutnhy]

i just got a credit card and im still getting used to how it works, im still a teenager lol. but i have like 2 questions to get a good understanding. i have a $500 credit limit, how much of that should be used? i was told around 15% which is like $100-$150. and 2- when i receive my statement, im told to pay the minimum by a certain date, so lets say i have $90 as a new balance but i have to pay like $25 as a the minimum payment, should i pay the $90 in full before the expected date or just the minimum??

[@HonestFinance]

With a $500 limit , try to keep the balance at the end of the billing cycle around $150 or less. And who told you to pay the minimum?? DON’T pay the minimum unless you have no other option. You’ll pay a lot in interest and it’s a rip off. Pay off your statement balance in full by the due date and you won’t pay interest if you do it every month.

[@linslins4860]

Hi, how about paying 50%, on your CC balance? Is that good enough?

[@HonestFinance]

That’s a great start!!

[@Trezn]

What if you get a new cc with 0% apr and you pay the min just so they report 100% payment history still

[@HonestFinance]

That will work, but eventually it’ll catch up if you owe a bunch of money and the 0% goes away. So try to pay off the card and continue paying 0%

[@jeffreyaviles8306]

What if u pay a late minimum payment like my minimum payment is on the 22 I literally have nothing right now what if I pay it 2 days later how bad is that on my credit or what’s the negatives

[@HonestFinance]

You’ll pay a late fee and it can be reported on your credit. I think it has to be 30 days late to do that, but I’m not 100% sure. Find the money and pay the minimum if you can . It’s not worth the late fee and penalty APR at all

[@imveryhungry112]

What happens to my credit if i cant make the payment one month?

[@rle9937]

So if I only pay the minimum payment does this interest accrue each day or is this per month when the statement is due?

[@HonestFinance]

Per month . They’ll take an average daily balance and charge interest each month until it’s paid off

[@rle9937]

@@HonestFinance thank you for this!! It’s crazy how many Americans are uneducated on finances.

[@saikik.6534]

I have a statement balance but not a minimum payment

[@HonestFinance]

Hmmm? The minimum should be an option unless your statement balance is lower than the minimum (maybe $50 or less)

[@coldfirebeats1]

so what if i pay 15% of my balance instead of 30% ,with the 5000 balance would that make that minium $25 -$125

[@walkingriver6104]

Great Video!

[@mimamimoo]

What happens if i only pay min amount fue

[@Sebastianx007]

What about the billing cycle using your credit card let's say after February's billing cycle has posted and the balance is more now but February is paid for and the remaining balance hasn't posted yet

[@ashcelebi9301]

It means remaining balance is still on a pending status. Try to create an account on your bank's website or call customer service

[@dogol-cha7801]

bro, thank you!

[@Tuloco00]

So if I pay the minimum will my available balance reset

[@HonestFinance]

No it won’t. It’ll go up by the amount you pay off. If you pay a $30 min , then your available balance will go up by $30.

[@ishvigor]

150 for 5000 owed buddy your math is way off more like 500

[@Mokimrozaradi273]

Does paying minimum affect your credit score ?

[@HonestFinance]

It can if you owe a lot compared to your available credit. Here’s a video I made that might answer your question in more detail. kzbin.info/www/bejne/aqexfYSgntR8jLs

[@Blessedgreenlight]

Can i make a minimum payment if i have to but then say few weeks later pay off the amount instead of going as the statement says like this many years and stuff would that be possible?

[@HonestFinance]

Yes you can do that. You can make as many payments as you’d like

[@Blessedgreenlight]

@@HonestFinance I can pay it off after the deadline as long as I make the minimum payment within due date as my goal is not to receive any penalties.

[@HonestFinance]

Make sure to pay at least the minimum before the due date, but you will pay interest. if you don’t pay at least the statement bal by the due date and you won’t pay interest if you do this every month

[@Blessedgreenlight]

@@HonestFinance okay understood

[@sparklejumpropequeen3794]

I have a question. It says my minimum payment of $25 is due on 07/21. And it says my last statement balance is $271.30, but so far I’ve used $390.82 of my $2,000 credit. I have the money to pay in full but I’m not sure weather i should just way for the minimum pay due date or if I should just pay in full right now. I also have autopay on but I’m not sure how much it of my whole fees it pays ( if it only pays the minimum payment due or the whole thing)

[@HonestFinance]

Great question. Pay off the statement balance of $271 in full by the due date to avoid paying any interest. Never pay the minimum because it’s a rip off. And the reason you’re seeing $390 is because you’ve made more purchases since $271 closed as your statement. That’s 100% normal . Autopay probably pays the statement , but I’d double check

[@kathiethompson6719]

Pay the minimum plus whatever interest was charged during that billing cycle. Best advice: STOP USING CREDIT CARDS.

[@traviousandrews1015]

Nah, use them correctly! I've used them for years and years and barely paid interest

[@bionicwoman9884]

I use mine responsibly and never pay interest so no I will not stop using them.

[@WordDefinition]

Do not look at the minimum payment. Instead look at the statement balance. Minimum payments are for losers. Paying your statement balance is the secret to using your credit card. If you can’t pay your statement balance you are spending too much then the word money is the root of evil comes to mind. Be careful. This is were people are scared of credit cards. Interest are monsters.

[@malsroomm]

so is it best to pay my statment balance a couple days before due date?

[@WordDefinition]

As long the statement balance is paid beforehand or on the due date

[@HonestFinance]

Yes, pay it in full. And then pay down your card again right before the cycle closes

[@jaimerosas1458]

Can I make a payment before my due date?

[@mohit8308]

does 0% APR credit cards has any minimum payment for that specific where company is changing 0 interest?

[@HonestFinance]

You’ll still have a minimum to pay, but it’ll be 0% for the promo period

[@traviousandrews1015]

Minimum is just the bare minimum you can pay to get it paid down. Obviously it's better to do more or full

[@HonestFinance]

That’s right. It’s always better to pay anything more than the minimum

[@anthonyfaucy2761]

@@HonestFinance Do you still get charged interest if you pay slightly above the minimum payment? For example even 1 cent over the minimum?

[@HonestFinance]

Yes. Anything below the statement balance being paid in full will start to accrue interest

[@joerip3906]

Hey I pay my credit card in FULL every single time. But I can only make the minimum payment this month and will be able to go right back to paying in full after this month. Is this bad? I really don’t want to mess up my credit! Plz responds. Please and thank you.

[@ezraarriaga8974]

Wait I have been paying off my credit card every month… like all of my current balance…. I thought you had to pay everything you owe at the end of the month 😭😂

[@withloveleli]

It varies per credit card. Ones with financing or installment payments arent like that others like bank credit cards you should pay off ur balance each month.

[@traviousandrews1015]

That's exactly what you should do! But you don't have to if you're in a jam. If you can pay it all, do it! You shouldn't spend more than you can pay.

[@SleepZoneX]

Hey I’ve been doing that to. But I realized that I have a minimum due each month not the full balance

[@TheOnlyDJChillWill]

So what will the interest be if I have paid my statement in full every month, but I pay approx the minimum one month (and then the next month I pay it off)? Will I keep having interest even after I've paid off my balance?

[@TheOnlyDJChillWill]

@honestfinance

[@icxcnika555]

i pay the minimum payment and some, but i still get auto charged a couple days after interest only ? specifically costco credit card, i thought the minimum payment included all the interest

[@islajohnson5572]

Try applying for 10,000$ did you apply I guess that will help sort out some bills and debit for you where are you from

[@clovernfmk9316]

I'm a beginner. Wondering what is the point of having a credit card if you have to pay in full. Which literally means you should be able to bear the full cost in the first place. No need credit card then?

[@JRJUNIOR215]

what if i make extra payments before minimum payment???

[@followerofjesustilltheend8315]

Okay but my question is when I go to make the minimum purchase if I just tap other purchase and pay more than 10% do I have to click on the minimum purchase option to get the date erased on my card or can I just click other payment option and then pay more than what I am asked to pay and that would count for my date I'm waiting I was supposed to pay

[@harrysidhu239]

Same Question 🙌

[@harrysidhu239]

Have you found any answer ?

[@saturdays3984]

Question, what if I paid the minimum payment for now, then I paid it whole (total amount due) before the next due date arrives... will I be charged for interest? how big will the interest be? Thanks.

[@HonestFinance]

You will pay interest on the remaining balance and on new purchases until the statement is paid in full a couple months in a row, so I’d avoid it if you can

[@HonestFinance]

And how much you’ll pay is based on your interest rate, how much your balance is

[@MrAnjuubaba]

Good video, What about this scenario, Lets say if someone is spending 1000 on groceries every month but paying by cash or debit card. His budget allows only minimum payment or slightly more than minimum payment, lets say 300 to pay old loan of credit card Would it be better for him to purchase groceries by credit card and pay in same month that is same day or maximum 4 days. Now in the same month he is paying 1300 instead of 300. Will the extra 1000 will be deducted from previous loan? and is it good for him to continue like this.

[@HonestFinance]

I would not add to the credit card if you’re currently paying interest. This is because they charge interest based on your average balance, so just keep paying it down, but don’t add $1,000 because it’ll still charge some interest (even if you pay it off that month). It will not bring down your previous balance at all

[@MrAnjuubaba]

@@HonestFinance Thanks

[@Jimfromearthoo7]

I’m trying to lower my monthly payment due on my cc. I owe about $8600 snd Citi bank is asking for $343. I can maybe make $250. I can I negotiate this ? Thanks

[@GenshinCouldNever97]

What about paying the minimum with money from credit card?

[@HonestFinance]

You can’t use credit to pay a credit card :(

[@GenshinCouldNever97]

@@HonestFinance yes but we reload the third parties app then transfer to saving acc then pay the credit card. Pay fully like 100$. Pay after statement date. So next month statement it will be the same right? So you can avoid minimum paid and interest.

[@randomfunwithjake27]

Getting my first credit card now and hoping i don't make a mistake but as i understand always pay your minimum and then pay even more on top of that but make sure the minimum is squared away

[@tierahoward874]

Thank you so much you really helped me

[@HonestFinance]

Glad it helped :)

[@HoldenMuhKnutz]

I pay $3 over the minimum 😂

[@Dynamic_speed.]

Does that work?

[@ubaidshahid5932]

Helpful ❤

[@HonestFinance]

Thanks

[@DiegoRivera-ez4pf]

What if I pay half in one month and half the next month? Does that increase my credit??

[@danyestrada100]

17% Rate do you mean the APR?

[@HonestFinance]

Yes

[@kimberleypuddicombe6168]

Hi i really need ur help with something 😊

[@santossalgado94]

You are the best man

[@MrYossi2010]

Thanks for doing this video and clearly explaining the concept of minimum payment. I have struggled to understand this.

[@CindyFily]

Does this apply for bank credit cards as well? I usually pay more than the minimum but always still owe about 5% of my credit limit. Is it safe to do that? So far I haven't seem to get charged.

[@HonestFinance]

Bank cards will work the same way

[@CindyFily]

@@HonestFinance Oh okay. It is good to have balance constantly? Or should I sometimes get it down to $0.00?

[@HonestFinance]

It’s up to you. As long as the balance is low and you pay off your statement bal in full each month, you don’t need to worry about much

[@CindyFily]

@@HonestFinance Oh okay. Thank you.

[@llewellyn56]

Great video. Thank you. I never use credit card only emergency. Credit score excellent. I try not to spend a lot. I use cash.

[@walex1101]

🫤 All 3 of my credit cards are maxed out. I am trying to pay the minimum payments price weekly to help pay all of them down.