How to Figure a Minimum Payment Due on a Credit Card Balance

Calculate a credit card minimum payment.

Figuring out your credit card's minimum payment can seem tricky. According to Bankrate, each credit card company calculates a minimum payment a little differently. Basic information such as your credit card balance, annually percentage rate (APR) and calculation method can help you accurately determine credit card minimum payments. Anticipating these payments will help you plan monthly expenses more accurately.

Instructions

1. Determine your credit card balance. Review your current statement or log on to your account online to find this information. Write down the current total balance, which will be used in the calculation.

2. Find your annual percentage rate. This percentage is usually located at the bottom of the credit card statement. If you have trouble finding the percentage rate, contact your credit card company. However, companies are required to clearly disclose this information on credit cards statements.

3. Determine how your minimum payment is calculated. According to Bankrate, there are a couple different ways creditors calculate minimum payments. Some companies charge interest plus 1 percent of your entire balance. Others may charge a flat percentage rate, such as 5 percent of the total balance. This information should be included under the "payment terms" section of your account statement.

4. Calculate your minimum payment. After you've collected the correct figures, use an online credit card calculator, such as Bankrate (See References). This will help you determine the minimum payment on your credit card balance. If you prefer to do the math yourself, the calculation is fairly easily. For example, if you have a $1,200 balance on your credit card and your minimum payment is 2 percent, you would owe $24 ($1,200 multiplied by .02).

5. Consider additional costs that may be tacked onto your minimum payment. According to Bankrate, late payments and over limit fees could be added on top of your minimum payment (which will increase your overall costs). Make sure to evaluate your statement carefully to consider these costs.

Tips & Warnings

• Contact your company to discuss lowering your annual percentage rate. If you've been a customer for a while and have a positive payment history, companies may lower your annual percentage rate to retain your business. This will minimize the amount of money you pay toward interest and may lower your minimum payment.

• If you make late payments, your annual percentage rate may increase substantially (which will increase your minimum payment). Always check your monthly statements for current interest rate information.

References

• Bankrate: Calculating your Minimum Payment; Kristin Arnold
• Bankrate: Credit Card Calculator
• Credit Cards: Cost of Paying the Minimum Payment