Many out there think that making only the minimum payment on their credit cards absolves them of all duties as responsible credit card owners. Well, that is hardly the case.

So much goes into how your creditworthiness is determined, and your ability to go beyond the minimum when you pay your credit card bills is one of those factors.

We will go so far as to say that regularly making only the minimum payment on credit cards, especially when there is a large outstanding balance, is a TERRIBLE idea. Read on to learn more about why you should make an effort to pay more than the minimum for each statement.

Minimum Payment

Your Outstanding Balance Continues to Bloat

When you continue to make only the minimum payment on your credit cards, your overall outstanding balance continues to bloat. Remember that each month, not only do previous dues get added on, but there’s also a painful interest component that gets added on.

All this only adds to the overall outstanding balance to an extent where the payment you are making may not make a difference at all!

This is definitely not the right course of action; you need to make more than the minimum payment on credit cards to ensure that the overall outstanding balance actually comes down instead of remaining the same (or worse… goes up)!

Making Minimum Payment on Credit Cards Gives a False Sense of Security

Many live with a false sense of security that as long as they are making the minimum payment due on their credit card, all is well. This is absolutely false!

In doing so, you are only creating an illusion of everything being fine. The truth is, however, that you are facing a daunting debt, which you could very well have a hard time paying off.

In fact, this is a major reason why when it comes to credit card payment, it is strongly recommended that bare minimum payments are avoided to the fullest extent possible.

Yes, there could be a temporary blip in income levels or an emergency expense that crops up; unless this is the case, though, it is advisable that you remain disciplined in your credit card usage, and to the furthest extent possible, make full payments on your credit card.

Late Fees on Delayed Credit Card Payments

In situations where you are only making the minimum payment on credit cards and also making them delayed, you will be faced with additional late payment fees.

We especially mention this aspect in this instance because those making minimum payments often have the tendency to make late payments, too.

So, it is a double whammy since you are faced with the additional interest burden PLUS added fees, which only go on to make things worse for you.

So, at the risk of repeating ourselves, we would stress that you should aim for maximum (ideally full) payment on your credit card AND also make sure that this payment is made in a timely manner.

minimum payment on credit cards
Making only the Minimum Payment on Credit Cards is a Bad Idea and MUST be avoided at all costs.

Inability to Use Your Credit Card Freely

Every credit card comes with a predefined credit limit. Your card would be no exception. As you make minimum payments, such that there is still a large outstanding balance left on your card, your available credit will obviously be reduced.

Eventually, you will simply not be in a position to make the most of your credit card. Let’s say of the 100% limit, you have 80% tied up since you have been making only minimum payments and there are interest charges plus fees being levied. As a result, there will only be a 20% credit limit available on your credit card.

In such circumstances, it will be very difficult for you to meet any major expense should it crop up suddenly.

This is yet another reason why it is always recommended that when it comes to credit card outstanding balances, you pay well beyond your minimum due. Only then will you find yourself in a position where you are able to use your card freely enough, to exercise the “power” that the available credit limit gives to you.

Heightened Stress

There is unbelievable stress associated with only making the minimum payment on credit cards.

Firstly, there is every chance that your bank might curtail your credit limit. This will only further limit your ability to use your credit card as we mentioned in the previous point; once the credit limit is reduced, you might get to a point where you are unable to use your credit card at all, while still having to make substantial payments on it!

Further, the pressure of paying off your credit card debt will constantly play out in your mind. If at some point you reach a stage where you are unable to make even the minimum payment that is due, the bank might start hounding you over the phone (or via any other permissible means). This will, no doubt, have an extremely adverse impact on your day-to-day wellbeing.

Two-Pronged Solution

Given the murky situations we have described above, as far as making the minimum payment on credit cards goes, there is a two-pronged solution that we recommend.

  • Disciplined Spending

You must keep your credit card spendings under check. With pretty much every purchase that you make, think to yourself, will I be able to pay for it, IN FULL, when the due date arrives?

The more you make this a habit, you are unlikely to find yourself in a position to make minimum payments only.

  • Making Full Payments

The second point involves making FULL payment of your ENTIRE credit card outstanding balance, as and when it falls due. This way, you will not have to contend with a lot of the negatives that come with making only the minimum payment.

Yes, this can be difficult at times. But, go back to the previous point about “disciplined spending”. If you do that, there should really be no reason for you to only be making the minimum payment on credit cards when you can easily make full payment.


Making only the minimum payment on credit cards clearly comes with its own set of perils, as this article has highlighted. At the same time, there are relatively easy solutions in sight.

To what extent you remain disciplined in your overall approach to credit card usage will really determine how things eventually pan out. There is so much to remember in order to responsibly pay off your credit card; check out why making late payments is also a bad idea.