Loans & credit
Minimum amount due
Also known as: Minimum due, MAD
The smallest amount you must pay on a credit card bill to avoid a late fee; a dangerous trap.
The minimum due is usually about 5% of your credit card bill. Paying it avoids a late fee and keeps your account current.
But it does not stop interest. The unpaid balance keeps compounding at credit card rates, and new purchases lose the interest-free period.
Treating the minimum due as your actual bill is one of the fastest ways to fall into a debt spiral.
For example
On a ₹50,000 bill, the minimum due might be ₹2,500. Pay only that and the remaining ₹47,500 starts accruing ~40% annual interest.