One of the most important terms in credit card usage is “Total Due.” Many people mistakenly believe that paying only the Minimum Due is sufficient. However, to ensure healthy credit card management and to avoid unnecessary expenses or interest charges, it is essential to have a clear understanding of Total Due.
Now, this article will explain in detail what Total Due means, how it differs from other terms, and why paying it in full is crucial.
▣ What Does “Total Due” Mean?
The Total Due on your credit card is the total amount you need to pay for a specific billing cycle. It includes all transactions, charges, previous outstanding balances, and any late fees or interest (if applicable).
In simpler terms, Total Due is the total of all the money you have spent using your card, plus any fees or charges added by the bank.
For Example, Suppose you spent amount 15,000 in your local currency through POS or online transactions, had a previous month’s outstanding of 5,000, and an additional late fee and interest of 1,000. Your Total Due would then be:
15,000 + 5,000 + 1,000 = 21,000.
▣ Is Paying Only the Minimum Due enough?
In your credit card statement, you will also see a smaller amount called “Minimum Due.” Paying this amount ensures your card is not reported as “in default.” However, if you don't pay the total due, the remaining balance will accrue interest.
Over time, this interest can snowball into a significant financial burden, making it much harder to repay.
▣ Key Differences between Total Due and Total Outstanding
After your statement is generated, you will generally see two key figures: Total Due and Minimum Due, along with a payment due date. Many people mistakenly assume that paying the Total Due shown in the statement will clear all their card dues (Total Outstanding). This is not always the case.
The total due displayed in the statement is essentially your Statement Balance, meaning the total outstanding as of the statement generation date. Paying this in full by the due date ensures no interest is charged for that billing cycle.
However, any additional spending you do after the statement date (but before the due date) will not appear in the current statement. These will be added to the next month’s statement, which means your Total Outstanding at any given moment can be higher than your Total Due.
Example: If your billing cycle ends on the 10th and your total due amount is 10,000 (due on the 25th), any purchases made between the 11th and 25th will not be reflected in this statement. Those transactions will appear in the next statement.
▣ Why paying the full Total Due is important
1. Interest-Free Period (Grace Period): Paying the Total Due in full on time allows you to enjoy the interest-free period offered by the bank.
2. Maintains a Good Credit Score: Timely and full payments reflect positively on your credit history.
3. Avoids Extra Charges: Prevents late payment fees and high interest rates.
4. Supports Future Borrowing: Good repayment behavior improves your eligibility for future loans and financial products.
▣ How to ensure timely Payment of the Total Due
- Plan your budget at the beginning of the month.
- Avoid unnecessary spending and maintain control over card usage.
- Regularly check bank apps, SMS alerts, and email notifications.
- Clear the Total Due well before the payment deadline.
So, according to me, If possible, always pay the Total Due—not just the Minimum Due. This habit will help you avoid unnecessary interest charges, financial stress, and long-term debt accumulation