Minimum Payment
The smallest amount you can pay on a credit card bill each month without incurring a late fee. Paying only the minimum keeps you current but extends your repayment period dramatically and results in paying significant interest over time. Always more effective to pay the full balance or as much as possible.
Related guides
- Full credit & FICO® glossary
Browse all defined terms by category.
- Annual Percentage Rate (APR)
The yearly cost of borrowing money, expressed as a percentage. APR includes interest plus certain fees, giving you a more complete picture of a loan's cost than the interest rate alone. For credit cards, the APR is the interest rate charged on balances carried month-to-month.
- Payment History
The most heavily weighted factor in your FICO score, accounting for 35% of the calculation. Reflects whether you've paid your bills on time. Late payments, collections, bankruptcies, and charge-offs all negatively affect this factor.
Frequently Asked Questions About Minimum Payment
What does Minimum Payment mean?
The smallest amount you can pay on a credit card bill each month without incurring a late fee. Paying only the minimum keeps you current but extends your repayment period dramatically and results in paying significant interest over time. Always more effective to pay the full balance or as much as possible.
Is Minimum Payment important for my FICO® score?
Understanding Minimum Payment helps you manage your credit profile more effectively, which in turn supports a stronger FICO® score.