What is a minimum payment and how does it affect my billing cycle?

A minimum payment is the smallest amount of money that you are required to pay towards your credit card balance each billing cycle in order to keep your account in good standing. It is typically a percentage of your outstanding balance or a fixed amount, whichever is greater.

The minimum payment affects your billing cycle in the following ways:

1. Due Date: The minimum payment has a due date, which is the date by which you must make the payment to avoid late fees and potential negative impact on your credit score. The due date is usually a few weeks after the end of the billing cycle.

2. Balance Calculation: The minimum payment is calculated based on your outstanding balance at the end of the billing cycle. If you have a balance remaining from the previous cycle, the minimum payment will include a portion of that balance plus any new charges or interest accrued during the current cycle.

3. Interest Charges: If you only pay the minimum payment, the remaining balance will accrue interest at the credit card's interest rate. This can result in carrying a balance from month to month and incurring additional interest charges.

4. Credit Score Impact: Paying the minimum payment on time helps maintain a positive payment history and avoids late payment penalties. However, paying only the minimum payment may result in a higher credit utilization ratio, which compares your credit card balance to your credit limit. A high utilization ratio can negatively impact your credit score.

It's generally recommended to pay more than the minimum payment whenever possible to pay down your credit card balance faster and reduce interest charges.