RBI MASTER DIRECTION · CREDIT CARD CONSUMER PROTECTION & TRANSPARENCY
Credit Card Minimum Due Trap Calculator
Expose the true cost of paying only the "Minimum Amount Due" (MAD). Discover how compounding 36%–42% APR finance charges trap cardholders in multi-decade debt spirals.
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₹5,000₹1 Lakh₹10 Lakh
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18% (Low-APR Card)42% (Standard 3.5%/mo)48% (Late Penalty Rate)
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3% (Aggressive Trap)5% (Bank Standard)15% (Accelerated)
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See what happens if you pay a constant fixed amount each month instead of reducing your payment with the minimum due.
Time to Debt-Freedom (Minimum Due)
18 Years, 4 Months
220 consecutive monthly payments⚠️DEBT TRAP WARNING
Paying only minimum due primarily funds the bank's compounding monthly finance charge (~3.5%/month + 18% GST). Your principal decreases at a crawl.
Total Interest Paid (Min Due):₹2,48,650
Total Outflow (Principal + Interest):₹3,48,650
Interest-to-Debt Ratio:2.49x Principal
🚀 Fixed Payoff Alternative:28 Months
Interest Paid:₹41,200
Net Rupee Savings:₹2,07,450 Saved!
Why Minimum Amount Due (MAD) is a Costly Trap
Under Reserve Bank of India (RBI) credit card directives, banks must disclose the interest consequence of paying only minimum dues. Here is the mathematical reality:
- Loss of Interest-Free Grace Period: The moment you pay less than the Total Amount Due, you forfeit your 45–50 day interest-free period. Every subsequent swipe incurs immediate interest from the transaction date.
- GST on Finance Charges: An 18% Goods and Services Tax (GST) is levied on every rupee of interest charged, compounding the overall cost.
- Credit Score Stagnation: Keeping balances rolling month-to-month inflates your Credit Utilization Ratio (CUR) above 30%, suppressing your CIBIL score.