Credit Card: What is the minimum due date of a credit card bill? Are you getting trapped in the trap of companies?

Credit Card Bill Payment Tips: The use of credit cards has been increasing for the past few years. Now people go shopping for groceries to phones through credit cards. It is important to remember that after using a credit card, you have to pay its bill. If you have noticed, then 2 amounts are seen in the credit card statement - Total Outstanding and Minimum Amount Due (MAD).

Minimum Amount Due is a part of your total bill. This is the amount that you have to pay to maintain the operation of your card. This payment has to be made by your due date i.e. payment date. Through minimum payment, the customer says that he will pay the credit card and the interest charged on its amount when the time comes. MAD is a small percentage of the total amount spent in the monthly billing cycle of your credit card. For example, MAD for Axis Bank credit cards is 2 percent of the purchases made in the billing cycle. In the case of ICICI Bank and American Express, MAD is 5% of the outstanding amount.

Benefits of paying the minimum due
If you pay the minimum amount due on time, then your credit card company or bank will not report you to the credit bureaus with poor scores. You can save your credit or CIBIL score by paying the minimum due.

Disadvantages of paying the minimum due
If you pay the minimum due, it should not be considered enough. This does not mean that you are relieved of the total outstanding bill of the credit card. Paying only the minimum amount due on the credit card bill can put you in a debt trap. Suppose your credit card bill is Rs 10,000 and you have less money this month. You pay only 5% i.e. Rs 500 (which is MAD). Now the remaining Rs 9,000 will be added to next month's bill. Not only this, the bank will charge you interest on this Rs 9,000. Most banks charge 3% to 4% interest every month.

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