The minimum is not a repayment plan
A credit card makes it easy to mistake a small required payment for an affordable way to borrow. But the unpaid balance remains a debt. Interest can accumulate on it, and a small payment may leave little to reduce the principal after interest is covered.
MoneySense explains that card interest is charged daily on the outstanding amount. If interest is not paid by the next due date, it can also attract interest in the next statement. New purchases may incur interest until the balance is fully settled. The terms and interest rate depend on your card, so use your own statement and card agreement rather than treating an example rate as a quote.
What a worked example makes visible
MoneySense provides an illustration using a S$5,000 credit-card balance, a 25% annual interest rate and a minimum payment of S$50 per month or 3% of the principal owed, whichever is higher. Under those stated assumptions, its calculation takes 175 months—about 14.5 years—to clear the debt, with total payments of S$13,500.
That is not a forecast for every cardholder. Actual results depend on the bank’s interest calculation, payment formula, new spending, fees and the amount paid each month. The example shows the mechanism: when the minimum payment is low relative to interest and balance, the debt can last far longer than expected.
In the example, the minimum payment is first used to pay interest due, and only what remains reduces the outstanding balance. If you continue to use the card, new purchases can add to the amount that needs to be repaid. The statement may look manageable while the debt’s end date keeps moving away.
A safer monthly routine
If you use a credit card for convenience or rewards, the cleanest routine is to pay the full statement balance by the due date, provided the money is already available. MoneySense says paying in full and on time avoids interest charges. A direct debit can help prevent forgetting, but check that the linked account will have enough funds.
If you cannot clear the balance, stop adding new card spending where possible and pay more than the minimum. List each debt with its interest rate, minimum due and balance. Keep at least the minimum payments current, then direct any extra repayment toward the highest-cost debt. If the situation is already difficult, contact the bank early and ask what repayment or financial-hardship options exist; do not wait until missed payments pile up.
Also look at the full cost of card use. Annual fees, cash-advance charges, late fees and foreign-transaction fees can add costs beyond the purchase price. For overseas purchases, MoneySense notes that conversion rates and international transaction fees may affect the final Singapore-dollar amount. Read the specific terms for your card.
Borrowing has an opportunity cost
Money that goes toward high-interest debt cannot simultaneously support an emergency reserve, a near-term goal or long-term investing. That does not mean every dollar should go to repayment if it would leave you unable to handle essentials; it means the interest cost belongs in the same financial plan as saving and investing.
Before making a new purchase, ask whether you could pay it off from money already set aside. If the answer is no, the minimum due is not proof that you can afford it. It only tells you the smallest amount the card issuer currently requires.
Sources
- MoneySense: Understanding credit card interest and charges — last updated 28 Sep 2026; verified 5 Oct 2026.