Understanding Minimum Payments vs. Full Payments

In the current era, there is no doubt that credit cards have become an indispensable financial tool due to the feasibility and convenience they offer while making purchases and managing overall expenses. However, one should keep in mind that understanding the dynamics of credit card bill payment is crucial to avoid falling into a debt trap, which many people tend to do. 

Therefore, one of the prime decisions cardholders in our country must make is whether to pay the minimum amount due or the full outstanding balance. 

What are minimum payments?

As the term implies, it is the minimum amount you, as a credit card holder, are required to pay on or before the payment due date in order to ensure that you don’t have to pay late fees. With a simple procedure of calculating a minimum amount, the financial institution (lender) ensures you can repay a portion of the principal outstanding every month.



  • Short-term relief

These offer temporary financial relief by allowing one to pay a smaller amount when you are facing financial difficulties. 

  • Prevents late fees

Paying just the minimum amount of your monthly bill helps you to avoid those unnecessary late payment fees and penalties, which can be quite hefty. 

  • Shields Credit Score

Initiating at least the minimum credit card bill payment keeps your score intact from being negatively impacted. 



  • Debt 

Always be alert regarding the fact that minimum payments can lead you into debt. Here, your outstanding balance continues to grow, making it harder to pay off in the long run. 

  • Higher Interest

With time, you’ll pay significantly more in interest. This happens when you tend to make only minimum payments every single time. 

  • Accumulation of interest

With this, you’ll incur interest charges on the remaining balance, leading to long-term debt. Therefore, be aware and spend wisely!

What are full payments?

As the term suggests, it is basically paying the full outstanding balance on your card by the due date. This is undoubtedly one of the best and ideal ways to use a credit card. It simply means clearing all your charges, including purchases, cash advances, and any outstanding interest or fees, in one go. 

If you tend to follow this practice every time, remember that it keeps your account in good terms and prevents the accumulation of high-interest charges. 

(Tip: I’ve a Credit card Kotak and I’ve set full payments for it, every single time. This has helped me a lot to improve my credit score.)



  • Savings on extra interest

Paying the full outstanding balance by the due date means you won’t incur any interest charges. This ultimately results in long-term savings as it helps you save a ton of money. 

  • Improved credit score

Paying your bill in a consistent manner every time impacts your credit score in a positive manner. This makes it relatively easy to access credit in the future. 

  • Avoidance of debt

Full payments are the best option to choose from every time indeed. This is simply because it prevents the buildup of debt, helping you maintain control over your finances. 



  • Requires financial discipline

This is not always easy and feasible for everyone. It requires a lot of financial discipline as well as effective budgeting. 

  • Limited Flexibility (Short-term)

It may leave you with less disposable income in the short term, as you’re clearing the entire balance at once. 

How to pay my credit card bill online?

Nowadays, even forget a PC or laptop, you just need your smartphone with the right application installed. In my personal experience, I recommend all the Bajaj Finserv application which I’ve been using for over a year for this purpose. Believe me, it is super easy to use and works smoothly. 

This has become one of the best way to pay credit card bill in recent times as people want to save time, money and energy. With just a few taps, you are more than good to go. 

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