Account Balance vs. Minimum Payment Due

Your minimum payment due is not the same as your account balance. If you assume the minimum payment due is all you need to pay each month, you could owe far more in interest charges than you budgeted.

Account balance
This is your total account debt as of the statement date. It includes any unpaid balance from last month, new purchases since the statement closing date of your last statement and any cash advances you may have taken. The credit card company will also add in any other charges such as an annual fee, interest charges and other fees.

Minimum payment due
This is the smallest amount of your balance you can pay by the due date and still meet the terms of your card agreement. The minimum payment due is often a specific fraction of the balance, such as 1/36 or 1/48. Some people think that the minimum payment due is the only amount you owe, but you actually owe the full balance. You'll owe interest on any portion of the balance that you don't pay.

Changes in minimum payment due
To help cardmembers pay off their debt faster, many large credit card issuers modified their minimum payment due requirements in 2005. This industry-wide change was designed to help customers pay down their balances more quickly. This change may have resulted in an increase in the monthly minimum payment due required for your credit cards.