Minimum Amount Due in SBI Credit Card

How is the Minimum Amount Due on my SBI Credit Card Calculated? 

The Minimum Amount Due (MAD) is the smallest sum you must pay by the due date to keep your credit card account in good standing. It's calculated by considering various factors such as taxes, EMIs (Equated Monthly Instalments), fees, charges, finance charges, retail spends, cash advances, and over-limit amounts. 

Here is the formula for calculating the Minimum Amount Due:

The Minimum Amount Due (MAD) on SBI credit cards is the minimum payment to keep your account in good standing, determined by:

1. GST: Goods and Services Tax applied to your outstandings 

1. EMI Amount: Total of Equated Monthly Instalments (EMI) or Monthly Installments erroneously labelled as EMI 

1. Fees/Charges: Applicable late payment fees, charged/ over limit fees, or similar fees 

1. Finance Charges: Interest that accrues on the balance outstanding 

1. Overlimit Amount: Any over limit amount 

The MAD will be notified to the cardholder by monthly statement, as well as SMS alerts. It is important to keep in mind that any payment made to your MAD will extinguish your immediate penalties, however your financial position may not improve where interest continues to accrue on the outstanding balance.  

From 15 July 2025, the calculation of Minimum Amount Due (MAD) for SBI credit cards is defined as follows:  

Minimum Amount Due (MAD) calculation

The MAD is the minimum payment required to keep your account in good standing and calculated as:  

1. 100% of GST  

1. 100% of EMI amount  

1. 100% of Fees/Charges   

1. 100% of Finance Charges  

1. Overlimit amount (if any)  

1. 2% of the outstanding balance remaining  

This calculation will ensure that you are repaying the principal outstanding each Month. 

Payment Allocation Hierarchy for SBI Credit Card  

Payments applied to the total outstanding amount on the card will be allocated, in order of payment application: 

1. GST - 100% 

1. EMI - 100% 

1. Fees/Charges - 100% 

1. Finance Charges - 100% 

1. Balance Transfer 

1. Retail Spend 

1. Cash Advance 

This hierarchy allows payments section off the dues that are the most pressing due first. 

Why this matters:

1. Avoid Penalties: Because the fees and EMI were paid first, there won't be any additional penalties. 

1. Effective Interest Reduction: Payments to finance charges & costs with high interest rates will reduce interest pay overtime. 

1. Clarified outstanding balance: Card holders know how any payment applied will impact each component of their account. 

1. Responsible Borrowing Support: By prioritizing payment urgency, the borrower is able to act on their payability to their contractual obligations and maintain integrity to the creditor.

Importance of understanding MAD for SBI credit cardholders

Understanding the Minimum Amount Due (MAD) is crucial for SBI credit cardholders for several reasons:

1. Avoiding Penalties: Paying MAD by its due date ensures you do not incur late fees and other behaviours costs. 

1. Maintain Creditworthiness: Making MAD payments on time takes you a step closer to maintaining a positive credit history and score which is necessary for future access to credit. 

1. Debt Management: Knowing your MAD allows you to understand your obligations and promotes responsible borrowing. 

1. Minimise Interest Charges: Paying a greater amount than the MAD results in less interest on the outstanding balance and can help you to pay down debt quicker. 

Difference Between SBI Credit Card Total Amount Due and Minimum Amount Due

This table provides a clear comparison between the Minimum Amount Due and Total Amount Due on SBI credit cards:

What are the Risks associated with paying only the minimum due?

Paying only the minimum amount due on a credit card can pose several risks for cardholders:

1. Interest Build-Up: Balances that carry incur interest, increasing the overall cost of borrowing. 

1. Longer Repayment Period: Paying only the minimum will lead to a long repayment period, and the risk of revolving debt. 

1. Credit Bureau Notification: Regularly paying only the minimum may signal to credit bureaus that you are in financial difficulty and once notified your creditworthiness will drop. 

1. Higher Cost: The longer any bll is outstanding the more interest is accrued, the less money you take home each month, and the more it affects your other financial goals. 

What are the Benefits of Paying more than the minimum due?

Paying more than the minimum amount due offers several benefits for cardholders: 

1. Reduction in Interest Charges: You shorten your outstanding balance and therefore have less interest to pay. 

1. Pay Off Debt Faster: You get to pay off a balance quicker which helps you become debt-free sooner. 

1. Better Credit Score: Your responsible borrowing is reflected in your credit report for a positive impact on your credit rating. 

1. More Financial Flexibility: You create available credit for emergencies or bigger purchases. 

Paying above the minimum lowers the outstanding balance lessening any interest charges, as credit card interest is usually calculated on the average daily, or end-of-cycle balance. If you can consistently pay above the minimum payment, it only accelerates your attempt to repay the debt, as the outstanding balance lowers, the payment towards the principal and not interest increases. This acceleration becomes a snowball effect: you might pay down the debt as quickly as possible while paying less in interest and ultimately gain financial freedom.

What if the Minimum Amount Due on the SBI Credit Card is Not Paid?

Not paying even the minimum amount due on your SBI credit card can have serious consequences and is a significant error in managing your credit card account. Here's a detailed elaboration:

1. Late Payment Fees: Initially, failing to pay the minimum amount due incurs late payment fees. These fees can accumulate over time, adding to the overall cost of borrowing. 
2. Reminder Messages: If you consistently avoid paying even the minimum amount due, SBI will likely send you repeated reminders through messages, emails, or letters, urging you to settle the outstanding balance. 

1. Third-Party Collection: In some cases, if the payment remains outstanding, the bank may engage a third-party collection agency to recover the amount owed. These agencies may employ more persistent and aggressive methods to collect the debt. 
2. Forceful Recovery: If attempts to recover the payment fail, the bank may resort to more forceful measures, such as legal action or asset seizure, to recoup the outstanding amount. 
3. Credit Card Block: Continued non-payment of dues could lead to the bank blocking your credit card to prevent further charges and transactions. This can inconvenience you, especially if you rely on the card for everyday expenses. 
4. Impact on Credit Score: One of the most significant repercussions of not paying the minimum amount due is the negative impact on your credit score. SBI, like other financial institutions, reports payment behaviour to credit bureaus like CIBIL. A missed payment or default is recorded on your credit report, leading to a drop in your credit score. A lower credit score can hinder your ability to access credit in the future, affecting your financial options for loans, mortgages, or even new credit cards.

SBI Credit Card Late Payment Charges for Non-payment of the Minimum Amount Due

If the Minimum Amount Due (MAD) is not paid by the due date for two consecutive cycles, an extra Late Payment Charge of Rs. 100 will be imposed. This charge will persist for each subsequent payment cycle until the MAD is settled.

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