Be careful of the disaster of paying a minimum credit card debt.

As we know using credit cards instead of cash, if used correctly, the privileges we will get are worth it. However, do you know that paying a credit card incorrectly, such as the minimum payment, will bring disaster to you without you knowing it? What is it like? ACU PAY will tell you about it!

What is a minimum payment?

There are two ways to pay your credit card: full payment or minimum payment. Minimum credit card payment is another option for those who are unable to make full payment in order to maintain their financial status without losing their credit history.

1. Minimum payment is not a right

Although the minimum payment seems to reduce the burden of monthly expenses by gradually paying installments, it is not a good thing to pay the minimum payment because we can’t complete our payment period, resulting in more debt and interest, most of which charge a maximum interest rate of 16% per annum.

2. Interest is charged from the day of credit card usage

After the credit card is charged for spending, if we pay the minimum amount of credit card, we will be charged two interest amounts:

1 : Interest on the principal 

The amount will be calculated from the card swipe amounts from the first date to the due date.

2 : Accrued interest

The second amount will be calculated from the interest on the balance after the minimum payment, from the date of our minimum payment to the conclusion of accounting in the following month.


For example, 

Mr. A buys for 20,000 baht. When the date is due, Mr. A does not have enough, so he chooses to pay a minimum of 10% or 2,000 baht. Mr. A will also be charged for principal interest and additional accrued interest from the total amount used.

3. There is no interest-free period

Usually, banks or financial institutions offer interest-free periods for credit card users from the first day they spend to the due date. This will help increase our liquidity without paying interest. Nevertheless, there’s an exception in the case that we’ve already paid the minimum card once, the interest-free period will disappear immediately. Therefore, every time we swipe a card, the interest rate will be charged daily and the interest will be paid from the day it was charged which turns out to be compound interest and adds more debt to ourselves unknowingly.

A simple trick that keeps us from overusing our credit cards is that once we’ve swiped our credit card, we can keep some money in the account to pay for credit card debt or transfer some of our income into the account we have opened for credit card debt payment only. Only if we’re disciplined in spending, we won’t have any debt to cause us a headache.

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