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RBI's Minimum Due Rules for Credit Cards: What the New Framework Means

RBI updated its guidelines on minimum amount due calculations in 2025. Here is what changed and why paying only the minimum due is so costly.

Creget Research 23 Mar 2026 4 min read

The Revised Minimum Due Formula

RBI's updated guidelines require card issuers to set minimum amount due (MAD) at no less than 5% of total outstanding (or ₹200, whichever is higher), plus all fees, EMI amounts, and any overlimit charges. Previously, some issuers set MAD as low as 2%, leading to prolonged debt traps.

The Math of Paying Minimum Due

If you have a ₹50,000 balance at 3.5% monthly interest and pay only the minimum (5%), your interest alone for the month is ₹1,750. The minimum due might be ₹2,500. You're barely making a dent in the principal. It would take over 5 years to pay off the balance — and you'd pay nearly ₹80,000 in interest.

What to Do

Never revolve a credit card balance if you can avoid it. If you must, pay as much above the minimum as possible each cycle. Consider a balance transfer to a card with 0% interest for 3–6 months, or take a personal loan at 12–15% to pay off a credit card balance at 36–42%.

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