Credit Card Payment Calculator
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Want to compute your minimum payment due? I've located a great credit card payment calculator for you. Also, I've contacted 7 banks to find their formulas for calculating the minimum payment due. Whichever you choose to utilize, keep in mind that neither are exact. Most credit card companies use different yet similar formulas to calculate their minimum payments due. Both methods provide you with an estimate to allow consumers to make credit card decisions.
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Follow these simple examples to figure your minimum credit card payment or jump to the credit card payment calculator link.
Two of the banks that I contacted use a calculation of 2% of the new balance on your bill.
Example: New Balance = $2,500.00
so $2,500.00 X .02 = $50.00 Minimum Due
That example is pretty simple. The next example, by another bank, adds the monthly finance charge to 2% of the new statement balance. Follow this example below.
Example: New Balance = $2,522.69 Finance Charge = $22.69
so $2,522.69 X .02 = $50.45 + $22.69 = $73.14 Minimum Due
This example will help pay your account off quicker of course since you're paying your finance charge each month. One of the highest percent minimum due computations encountered was a whopping 2.25% of the new statement balance. Here's an example of this method.
Example: New Balance = $2,500.00
so $2,500.00 X .0225 = $56.25 Minimum Due
Now for the lowest minimum due calculation. A mere 1% of the new statement balance with a minimum charge of $15.00. I'm going to provide two examples for this scenario.
Example 1: New Balance = $2,500.00
so $2,500.00 X .01 = $25.00 Minimum Due
Example 2: New Balance = $500.00
so $500.00 X .01 = $5.00 but the Minimum is rounded up to $15.00
Here's the most confusing minimum due calculation. It's formulated at 1% of the new statement balance plus fees and finances charges or 1.5% of the new statement balance, whichever amount is greater.
Example 1: New Balance = $2,522.69 Finance Charge = $22.69
so $2,522.69 X .015 = $37.84
and $2,522.69 X .01 = $25.23 + $22.69 = $47.92 Minimum Due
as you see, the later is the minimum due since it's a higher dollar amount based on 1% plus finance charges.
Example 2: New Balance = $2,503.96 Finance Charge = $3.96
so $2,503.96 X .01 = $25.04 + $3.96 = $29.00
and $2,503.96 X .015 = $37.56 Minimum Due
Since the finance charge is less in this example, the 1.5% calculation was used for the minimum due.
The final bank would not give me any type of specific formula. They stated their minimum payments were anywhere from 2% to 6%! In all, it's best to read your credit card agreement as soon as you receive any new credit card. It is full of the details you need to determine your minimum due. Even ask when applying for a credit card how the company calculates your minimum due. Most companies will be happy to advise you just as they did myself. Just follow the examples above and I'm sure you'll be good to go.
Also please keep in mind, these formulas do not take into consideration if you are past due, over the credit line, or in a default rate. In these cases, the payments are normally much higher.
Finally, I would like to share an excellent credit card payment calculator offered through Bankrate. It's a great tool to utilize and avoid manual calculation. This
credit card payment calculator
, allows you to only calculate the monthly minimum based on percentages due. It even has an option to do a 1% plus finance charge calculation. What a benefit!
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