When your credit card statement arrives, the term “Minimum Amount Due” (MAD) might seem like a relief. But what if we told you that paying just the MAD could actually hurt your financial health?
Let’s break down what the Minimum Amount Due really means, why it exists, and how it can impact your CIBIL score and interest payments.
✅ What Is Minimum Amount Due (MAD)?
The Minimum Amount Due is the minimum amount you need to pay by the due date to avoid a late payment penalty. It usually ranges from 2% to 5% of your total outstanding balance.
📌 Example:
If your total credit card bill is ₹50,000, the MAD might be only ₹1,500 – ₹2,500.
⚠️ The Hidden Trap of Paying Only the MAD
While it might seem manageable, paying just the MAD means:
- 😱 You’re carrying forward the remaining unpaid balance
- 💰 The bank continues charging high interest (up to 36–42% per annum) on the rest
- 📉 Your CIBIL score may drop due to poor repayment behavior
- 🔁 You enter a debt spiral with mounting interest
📊 How Is MAD Calculated?
The MAD includes:
- A small percentage (2–5%) of your total due
- Any unpaid minimum due from the previous cycle
- EMIs (if opted for on purchases)
- Taxes and fees, if applicable
🧠 Why You Should Always Pay the Total Amount Due
To stay financially healthy, make it a habit to:
- 💳 Always pay the total outstanding amount
- ⏰ Pay before or on the due date
- 📈 Track your monthly usage to stay within limits
- 🙅 Avoid converting bills to EMI unless absolutely necessary
🛡️ How Shivafinz Can Help
At Shivafinz, we educate individuals and businesses to make smart financial decisions. Whether it’s credit card usage, home loans, or business loans, our experts help you stay credit healthy and eligible for future loans.
🎯 Don’t let MAD decisions affect your long-term goals.
📞 Final Words
Paying only the Minimum Amount Due is a short-term relief with long-term consequences. Be financially wise. Understand the numbers. And always pay in full when possible.
👉 For real-time financial advice, connect with Shivafinz today!