Short answer. Pay only the minimum due and a ₹1,00,000 card bill at 2% a month, with a 5% minimum due, takes 143 months, almost 12 years, to clear. It costs ₹82,235 in interest and 18% GST. Paying ₹10,000 a month clears it in a year for ₹15,300. Our calculation, on RBI's rules as of October 2026.
The calculator
Money foundationsYour bill, your card's rate and your card's minimum-due rule. All three are on your statement or in the card's terms (the MITC, most important terms and conditions). The maths runs on this page and nothing is sent anywhere.
Our calculation. 30-day months; daily interest at your monthly rate × 12 ÷ 365; you pay on the due date; your payment clears GST, then interest, then what you spent; interest only on what you spent that's still owed, never on billed interest or GST. No new spending, no late fees. Paying the whole bill on the due date ends it.
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Why the minimum due is a trap
The methodThe minimum due is the smallest payment that keeps you from being overdue. That's all it does. It's not a plan to clear the card.
Here's the catch. Your purchases were interest-free only if you paid the whole bill by the due date. Pay anything less and that's gone: RBI's rules let the card charge interest from the date of each purchase, on whatever's still owed after your payments. So a swipe on the 1st can collect interest for 35 days before your first payment even lands.
Then the government takes its cut. Interest on most loans is exempt from GST. Credit card interest isn't, so 18% goes on top of every rupee of interest.
And the minimum due shrinks as your bill shrinks. 5% of ₹1,00,000 is ₹5,000. 5% of ₹20,000 is ₹1,000. Each month less of your payment goes to what you actually bought, which is why the tail drags on for years.
RBI makes every bill carry the warning: paying only the minimum stretches repayment over months or years. This shows you how many.
Worked example
Our calculationA ₹1,00,000 bill. The card charges 2% a month, the rate RBI uses in its own illustration. The minimum due is 5% of the bill, at least ₹200 (illustrative). Purchases spread through the month, due date 20 days after the statement.
| Plan | Months to clear | Interest | GST | Interest + GST |
|---|---|---|---|---|
| Minimum due only | 143 (almost 12 years) | ₹69,690 | ₹12,544 | ₹82,235 |
| ₹10,000 every month | 12 | ₹12,966 | ₹2,334 | ₹15,300 |
| Minimum due only, at 3.5% a month | 331 (almost 28 years) | ₹2,96,203 | ₹53,317 | ₹3,49,520 |
Paying ₹10,000 a month instead of the minimum saves ₹66,935 and 131 months. And notice the first month: at 2% a month, interest of ₹2,926 lands on the very next bill, because the purchases lost their interest-free days.
Illustrative, our calculation. Rates and minimum-due rules differ from card to card; use the numbers on your own statement. No card or bank named.
Get the sheet
FreeCredit card minimum due sheet
Questions people ask
Money foundationsWhat happens if I pay only the minimum due on my credit card?
You're not overdue, so there's no late fee. But you lose the interest-free period: interest can run from the date of each purchase on whatever's still owed after your payment, and 18% GST goes on the interest. RBI makes every bill warn that this stretches repayment over months or years. Source: RBI Credit Cards and Debit Cards Directions, 2025, paras 23(3) and 23(6).
How is credit card interest calculated in India?
Daily, at your card's rate, on the amount outstanding after payments, refunds and reversals, from the transaction date once you don't pay the full bill. A 2% monthly rate is 24% a year. Your card's terms must explain the method with examples, including when you pay only part of the bill. Source: RBI Credit Cards and Debit Cards Directions, 2025, paras 22 and 23(6).
Is GST charged on credit card interest?
Yes, at 18%. Interest on loans is exempt from GST, but the exemption leaves out "interest involved in credit card services". So ₹1,000 of card interest costs you ₹1,180. Source: CBIC Notification 12/2017-Central Tax (Rate), entry 27.
Can the minimum due be less than the interest?
No. RBI says the minimum due must be set so there's no negative amortisation, so it covers at least that bill's interest, taxes and charges. If it covers only those, what you spent never goes down. The calculator flags it. Source: RBI Credit Cards and Debit Cards Directions, 2025, para 23(2).
How long does it take to clear a credit card paying only the minimum?
Years, not months. In our worked example, ₹1 lakh at 2% a month with a 5% minimum due takes 143 months. At 3.5% a month the same bill takes 331. Put your own card's numbers in the calculator.
The rules this uses
Last verified 30 Oct 2026The rate and the minimum-due rule come from your card. The rules around them come from RBI and the GST notifications, read at the source.
| Rule | Official source |
|---|
Known limits
Read these first- It assumes you stop using the card. New spending while you carry a balance gets no interest-free days either, so the real cost is higher.
- It assumes you pay on time, every month. Miss a due date and late fees, more interest and a mark on your credit report follow.
- Real billing months run 28 to 31 days, and cards can differ on how they count days and in what order your payment clears the bill. Your card's terms have to explain its method with examples (RBI, para 22).
- Some cards bill a last bit of interest for the days between the final statement and your final payment. We stop at the payment, so our figure can be a little low.
- Cash withdrawals, EMIs on the card and balance transfers follow their own rates. They're not in here.
- We don't round to the paisa each month the way a statement does. The difference is a few rupees.
Tested against 33 checks: hand-worked cases and a day-by-day simulation written separately (v1.0, 30 October 2026), matched to the paisa. The sheet matches on six cases.
Education only. This newsletter is for education only. It is not investment, tax or legal advice and does not recommend any security or product. Do your own research or consult a registered professional.