Is that a percentage of the balance on the credit card or is it straight something like 15 dollars monthly minimum payment, for example, if u have a balance of $ 800 on ur credit card and u have $ 50 balance on a similar credit card what would be the minimum payment due for each account? Tnx..
How do banks determine minimum payment that is due on the credit cards??? I need this info please,?
02
May
shipwreck
May 2, 2010 at 1:37 am
Either 2 or 4% of the balance.
UrbanPhotos
May 2, 2010 at 2:08 am
I don’t think it’s the same for every credit card.
You should go to the web site of the bank that issued your card and look it up, or call the toll free number on the back of your credit card and ask them.
Will Bleed For Kicks
May 2, 2010 at 2:56 am
Generally its an amount that won’t help the card holder pay off the balance.
bdancer222
May 2, 2010 at 3:11 am
The minimum payment is a percentage of the balance — usually 3% to 5%, depending on your credit card terms.
Minimum payments tend to only cover new interest and very little of the balance. It is a very bad idea to only pay the minimum. Pay off balances as quickly as you can. The best way to use a credit card is to only charge what you can afford to pay in full every month. Saves you lots of interest and keeps you out of debt, while building good payment history.
Heather
May 2, 2010 at 3:52 am
In the past, most companies calculated your minimum payment as 2% of your account balance. Now, however, many companies are using a new formula.
The minimum monthly payment equals 1% of account balance plus finance charges plus fees.
Assuming an account balance of $4000 at 16% APR:
1% of $4000 is $40.
The monthly finance charge on $3960 ($4000 – $40) is $52.80.
The minimum monthly payment would be $40 + $52.80 = $92.80.
After searching the web, most of the information about credit card companies and minimum payments was about the old way, of charging a flat 2% (or 4%). Bank of America and Citibank, however, did confirm that they use the 1% + finance charges + fees method. Also, if you were wondering how I figured the monthly finance charge on $3960 at 16%, I simply divided $3960 by 12 (months in a year) and came up with $330. and then subtracted 16% = $52.80.
Credit Expert
May 2, 2010 at 4:29 am
Usually it is the MAX of 3% of your balance or $15.
Every credit card is slightly different so call your credit card company.