Minimum payment

The minimum payment is the amount a credit agreement requires you to pay by the due date to keep the account current. Card agreements compute it in different ways: a percentage of the balance, a percentage plus interest and fees, or a flat floor such as $25 or $35, whichever rule the contract states. The statement prints the result. The contract is the definition.

Interest is assessed before principal in the usual application of a payment. If the minimum is smaller than that month’s interest, the balance is larger after you pay. A payoff plan that assumes the balance will fall needs a payment at least as large as the interest, and larger if principal is supposed to move. The calculators on this site reject a minimum that fails that test on the starting balance.

Paying the minimum avoids a late fee and a late report if it arrives on time. It does not, by itself, preserve a purchase grace period. Grace periods generally require the full statement balance. In a multi-debt payoff, each account still receives its own minimum. Extra money is what avalanche or snowball then directs. The minimums-only path never redirects a finished account’s minimum. That is the baseline those orders are measured against.