Total Amount Due vs Minimum Due: The High-Cost Indian Card Trap

The Minimum Due Illusion

Bank credit card statements prominently display the Minimum Amount Due (MAD), typically 5% of your outstanding balance.

Many young cardholders mistakenly assume paying the MAD avoids interest. In reality, paying MAD only avoids a late payment fee on your credit report; it unleashes devastating finance charges.

What Happens When You Pay Only Minimum Due:

1. 42% Annualized Interest: The unpaid balance attracts 3.25% to 3.75% per month (approx. 40–44% per annum) calculated daily.

2. Loss of Interest-Free Window: Every single new purchase (even a ₹100 coffee) immediately accrues interest from the exact second of swipe.

3. 18% GST on Finance Charges: The Government of India levies 18% GST on all interest and processing fees, compounding the burden.

The Golden Rule: Always set up Auto-Debit for Total Amount Due, never Minimum Due.