ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The minimum payment is the smallest amount of money that you have to pay each month to keep your account in good standing. The statement balance is the total balance on your account for that billing cycle. The current balance is the total amount of your most recent bill plus any recent charges.

Detailed explanation-2: -A minimum payment is exactly what it sounds like: It’s the bare minimum you’re contractually obligated to pay each billing cycle. If you don’t pay at least the minimum by the due date, you could be hit with a late fee and penalty APR, or annual percentage rate.

Detailed explanation-3: -The minimum monthly payment is the lowest amount a credit card issuer will accept as payment on a credit card balance to keep a cardholder in good standing each month. A cardholder is not required to pay off a balance every month, but it’s always a good idea to pay a balance in full before it accrues interest.

Detailed explanation-4: -Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance.

Detailed explanation-5: -Only Making Minimum Payments Means You Pay More in Interest Plus, only paying the minimum means you’ll be in debt for much longer. Why? Only a small percentage of a minimum payment is applied to the card’s principal balance-the remainder takes care of the accrued interest and fees.