How to Calculate a Credit Card Minimum Payment

The process used to calculate a credit card minimum payment is actually quite easy to learn. Below you will find the steps you need to follow to start calculating your own credit cards minimum payments.

Things You'll Need

• Calculator
• Credit card Statement

Instructions

1. Find out what percentage your credit card company expects first, as far as a minimum payment. Either on your bill or on their website there should be information that tells you what percentage of your balance is expected (1.5%, 2%, 4%etc).

2. Take the total balance owed (outstanding balance) on the credit card (not your credit limit). Take your outstanding balance and multiply it by the minimum payment percentage. This should bring up your expected (principle) minimum credit card payment allotting your company does not expect you to round the total up (see next step).

   An example will be shown in the final step.

3. Check with your credit card company to make sure that they do no round up your minimum payment. Say your calculations claim you owe $123.52 as a minimum payment your credit card company may expect that to be rounded up to $124, $125 or $130.

4. Adding on your monthly interest rate involves first finding out what your credit card company charges as your annual interest rate - for the purpose of the proceeding example we will say 6.99%. To come up with the amount owed in interest you simply take your credit card balance -for this example we'll say $2500 - and multiply it by the interest rate charged by the company (6.99%). Then you simply divide that answer by 12 to come up with the monthly balance.

5. Follow this example (using your own information) to calculate your credit card minimum payment:

   $2500 (balance on credit card)
   x 4% (minimum-percentage to pay on balance)
   ________
   $100

   Interest Rate Example
   $2500
   x6.99%
   _______
   $174.75

   $174.75/12 = $14.5625 (we can just round this to $15)

   This would give you a complete minimum payment including interest of $115. That is the result of step two and the result of step four added together: $100 + $15 (interest).

   Note** When using the percent sign as shown in the above examples DO NOT hit the = key, instead simply "2500" x 4%" and then "2500 x 6.99%"

Tips & Warnings

• Some companies simply charge a flat fee, in those cases you do not have to calculate as your flat fee is your complete minimum payment expected and bill time.

• This will not work with all credit cards as some compute the payments and what's due differently.