Personal Finance Term
Minimum Payment
The smallest amount you must pay on a credit card by the due date to keep the account in good standing and avoid a late fee. In Malaysia this is typically a small percentage of your balance, subject to a minimum amount.
Paying only the minimum keeps you from being marked late, but it is one of the most expensive habits in personal finance. The rest of your balance continues to accrue interest, so a balance paid off only at the minimum can take years to clear and cost far more than the original spending. Malaysian cards usually set the minimum as a percentage of the outstanding balance or a fixed floor, whichever is higher.
The practical rule is to pay the full statement balance every month so you owe no interest at all, using the interest-free period to your advantage. If you genuinely cannot pay in full, paying as much above the minimum as possible shortens the debt and cuts the interest. Relying on the minimum payment month after month is often the first sign that a card balance is becoming unmanageable, and it may be time to consider a balance transfer or speaking to AKPK.