Discover Card Minimum Payment Formula:
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The Discover Card minimum payment is the lowest amount you must pay each month to keep your account in good standing. It's calculated as the greater of 2% of your balance or $20.
The calculator uses the Discover Card minimum payment formula:
Where:
Explanation: The formula ensures you always pay at least $20 or 2% of your balance, whichever is greater.
Details: Understanding your minimum payment helps with budgeting and avoiding late fees, though paying only the minimum will result in paying more interest over time.
Tips: Enter your current principal balance in USD. The calculator will determine your minimum payment based on Discover's standard formula.
Q1: Is the minimum payment always 2% of my balance?
A: No, it's the greater of 2% of your balance or $20. For balances under $1,000, you'll typically pay $20.
Q2: What if my balance is less than $20?
A: You'll pay the full balance amount as your minimum payment.
Q3: Does paying only the minimum affect my credit score?
A: No, as long as you pay at least the minimum on time. However, high balances relative to your limit can affect utilization.
Q4: How can I reduce my minimum payment?
A: By paying down your principal balance. The minimum payment will decrease as your balance decreases.
Q5: Are there exceptions to this calculation?
A: In special circumstances (like promotional rates or hardship programs), different terms may apply.