Decision practice
Minimum Payment vs Fixed Payment
Practice distinguishing an issuer's estimated minimum-payment rule from a separate fixed-payment payoff plan designed to reduce a balance faster.
Editorial status: Human-reviewed and published.
Situation
A statement balance is $2,000 at 24% APR with $10 in fees. A simplified minimum rule uses the greater of $25 or 1% of the balance plus estimated interest and fees. The cardholder can choose to pay $200 instead.
Decision method: identify the fee or rate that applies, write down the date and balance used, then compare the result with the current agreement.
Sources
- Consumer Financial Protection Bureau — Credit card interest calculation
- Consumer Financial Protection Bureau — Credit card minimum-payment disclosure
Sources are listed so readers can verify the key facts, assumptions, and limitations behind this page.