Credit Cards

When You Shouldn’t Pay More Than a Minimum on Your Credit Card, Even if You Have Money?

EPF Last Update: September 29, 2020

If you’ve spent some amount of your credit card the best advice would be one of these:

  • Pay the debt as soon as possible, so you stop paying interest fees.
  • If you can’t pay the full amount, then pay at least the minimum on time, so you avoid penalty fees and you prove that you are a good customer. That way your credit score remains clean and also you increase the trust in your card issuer, so you can expect better offers from them. These offers could be a limit increase, better credit card, and so on.
  • If you can’t pay the full amount, then pay as much as you can, so you lower your credit card fees. Credit card fees apply only one the amount that is due.

For example:

Let’s say that your credit card limit is $1,000, and your minimum is $30. Let’s also say that you have spent these $1,000 and now you plan to pay $300. If you do so, then the fees that you will continue paying will be only on the amount that is due, which is $700.

So if the interest fee on your credit card is 1% per month, then:

  • With $1,000 spent on it, you pay $10 in fees per month.
  • If you pay $300, then you will pay interest only on the remaining amount, which is $700. This means that you will continue paying $7 per money.

So if you pay these $300, you will save: $10 – $7 = $3.

Based on this example, the tip that we should give you is obvious. Pay as much debt as you can, so you lower your fees!

Most people do it.

But this is NOT always the case!

There are some cases where you actually lose money if you pay as much as you can.

And we will show you this with another example.

When You Shouldn’t Pay More than a Minimum on Your Credit Card, Even if You Have Money?

Do you know that many credit cards have some hidden fees? One of them that we will discuss today is the withdrawal fee.

What is the withdrawal fee?

This is a fee that is attached to your credit card. It apply every time when you withdraw some money from the card.

The withdrawal fee can be:

  • Flat.
  • Percentage.
  • Both.

A flat fee means that every time that you withdraw money, you pay a flat fee, let say $10 for example.

A percentage fee means that you only pay a percentage on the amount that you withdraw.

And both mean that you pay Flat + Percentage.

And here is the problem.

Many people, who use the strategy to pay as much debt as possible and then withdraw money again, actually lose money.

We are back on our example above, but now we will extend it.

You have a credit card with a limit of $1,000. You have spent all of the money. Now you plan to pay $300. But in a few weeks, you go and get $100.

Now, let’s count again.

If you pay these $300, you will save: $10 – $7 = $3.

But if you go and get $100, and you pay $10 withdraw fee, you will lose money.

You save $3 in interest fee, but you actually lose $10.

But what would happen, if you’ve planned your finances better?

You would pay only $200 on your credit card and you now don’t go and get money again. In this case:

You would pay an interest fee on the amount of $1,000 – $200 = $800. This means $8.

But you wouldn’t pay this $ 10 withdrawal fee again in a few weeks.

So you save money.

How Can I Optimize My Finances to Save Money with This Strategy?

  • Use credit cards with no withdraw fee

If you plan to use your card often, then better find a card with no withdrawal fee. There are a lot of them. However, in some cases, these cards come with higher annual fees or higher APR. But if you are a regular card spender, this could save you a lot of money.

Let’s only mention one extra problem. Let’s say that you plan to apply this strategy from today. There is always a possibility of mistakes. On every buck, you have to always count when to withdraw, when you fund again. This is so complicated.

Add also the fact that unexpected situations in your financial life could always happen.

This problem could be resolved with no withdrawal fee.


  • Plan your budget carefully

This is something that everyone should do. But, in fact, no one can be exactly sure about his spending. But better financial planning could always help.

How Can I Count How Much Should I Fund in My Credit Card Today?

To do so:

  • You have to count the fees on the amount that you plan to put in the card for a period of time that you don’t plan to touch it.
  • To count the withdraw fee on this same amount, for a certain period of time.
  • Compare both values.


If you put $100 in your card and your interest fee is 1% per month, you would save $1.

But if you plan to get withdraw these $100 in a month and your withdrawal fee is $10. This means that you’d lose $10 – $1 = $9.

So, better leave these $100 in your pocket or put them in another card that you have with no withdraw fee.

If you plan to put $100 on a card with $10 withdrawal fee, you should be sure that you won’t touch this money for at least 10 months.


Because the fee on these $100 is $1 per month.

But if we want to count 100% correctly, we also have to add the fact that, if the credit card is not paid in full there will be remaining fees on it in the next 10 months, which will change the thing.

And here things become more complicated.

So the best tip that we can give for people who plan to play with their card often is – get a card with no withdrawal fee.

Can I Lose a Lot of Money if I Don’t Use Your Strategy?

Yes, you can lose a lot of money!

We don’t want to say that people who don’t use this strategy will save millions but trust us the amount can be higher than you expect.

And here are a few reasons why.

In this case, we gave example only with $100. We’ve mentioned values like $1, $3. But in most of the cases, people work with more money. This is one of the problems.

The constant usage of the card leads to a constant loss of money.

So, if you do the count one day, you will find that for a relatively long period of time you’ve paid a lot of money.

Many people often don’t care about these fees, because they are little. But in time, after constant money leaking, you will count an amount that will be higher than you can expect.

And these are money that you give to your credit card issuer for no reason!


We hope today you’ve learned another useful strategy from us.


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