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Established Member
Posts: 54
Registered: ‎08-26-2007
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How do ccs compute the minimum payment?

I already know it varies from card to card, but am I missing something that's clearly stated in terms or do I gotta call the particular card I'm interested in & ask?

BTW, not planning on shooting self in foot by only paying the min :-), but just think it's something I should know when app'ing for BT card.
Moderator Emeritus
Posts: 16,373
Registered: ‎03-12-2007
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Re: How do ccs compute the minimum payment?

Typically minimum payments are computed by simply dividing the minimum monthly payment per statement (varies by CCCs) by the account balance. For more info check out this link.
 
 
Credit Profile -
FICO 08 Scores (03-26-2015): EQ 814, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26 years ~ AAoA: 13 years ~ Util: 1% ~ Inqs: EX 1, EQ 1
Moderator Emeritus
Posts: 6,794
Registered: ‎09-29-2007
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Re: How do ccs compute the minimum payment?

Far be it from me to correct a mod....BUT... :smileyhappy:
 
Bankrate is bad about leaving outdated information on their site.  That article is from 2002 and it's not really accurate anymore.  There were some changes in the last couple of years to the way CCCs calculate minimum payments (don't remember exactly when they took effect).  These days it's a little more complicated than just applying a simple percentage.  Under the old method, lots of people with high APRs making just the minimum payments were seeing their balances continuing to rise because the minimums were not enough to cover the monthly accruing finance charges.  Under pressure from regulators (and perhaps some actual new regulations, I don't really remember), the calculation was reconfigured so that the minimum payments would be higher on high-rate accounts than they were before.
 
Like you said, the calculation varies from one CCC to another, but generally it's something like this:
 
The lesser of:
 
2% of the statement balance PLUS all accrued finance charges
 
OR
 
3% of the statement balance...
 
...unless that figure is less than a set amount, say $10 or $15, depending on the issuer.  In that case, the minimum payment will be the $10 or $15...
 
...unless that figure is greater than the statement balance, in which case the minimum payment will be the statement balance.
 
This is only an example, but it should give you some idea.
 
----------------------------
App free since 7/11/08.
TU 744 / EX 710 / EQ 694 (Starting to slip. :smileysurprised: )
Moderator Emeritus
Posts: 16,373
Registered: ‎03-12-2007
0

Re: How do ccs compute the minimum payment?

No worries, I'm not offended or upset with you in any way.:smileyhappy: If any member has information, new or not so new, and wishes to share it by all means do so. I was giving some very basic info, so thank you for adding what you have. Us mods are not omniscient! lol :smileyvery-happy:

 

Credit Profile -
FICO 08 Scores (03-26-2015): EQ 814, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26 years ~ AAoA: 13 years ~ Util: 1% ~ Inqs: EX 1, EQ 1
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