What is the credit card minimum-payment trap?
Last updated: 2026-07-11 · Educational content; not legal advice.
Short answer
Paying only the minimum keeps your account current but leaves most of the balance unpaid, so the finance charge (up to 3% per month under BSP Circular 1165) keeps accruing on that unpaid balance and the balance shrinks very slowly. RA 10870 §11 obliges the issuer to print this warning on your statement: "Paying less than the total amount due will increase the amount of interest you pay and the time it takes to repay your balance." Paying the full statement balance by the due date avoids the revolving finance charge entirely.
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Frequently asked
Is paying the minimum a default?
No — paying at least the minimum by the due date keeps the account current and avoids a late-payment fee. But the remaining balance still accrues the finance charge, so the debt can persist for a long time.
Is the warning on my statement required by law?
Yes. RA 10870 §11 requires the issuer to disclose that paying less than the total due increases the interest you pay and the time to repay. That warning is a legal disclosure, not marketing.
How do I get out of the trap?
Pay more than the minimum — ideally the full statement balance — to stop the finance charge from accruing on the carried-over amount. If you are already struggling, ask the issuer in writing about a fixed-term restructuring or balance-conversion plan.
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Your rights as a credit-card holder — the BSP interest-rate cap, how interest and fees are computed, the minimum-payment trap, raising rates, cancelling a card, collection harassment, credit reporting (CIC), and why unpaid card debt is civil, not criminal (you cannot be jailed for it).