Paying only the minimum on a credit card

Every credit card statement has a line called the minimum payment. It is the smallest amount the bank will take that month without a late charge. It is not what you owe.

Paying only that keeps the debt alive for a long time. Here is how long, in Bank Negara Malaysia's own numbers, and the DECADES cards where a player meets it.

The rules below come from Bank Negara's policy document on credit cards, issued on 19 December 2025.

The minimum and the interest

The policy document says the minimum each month must be at least 5% of what you owe, plus any instalment plans on the card. Its worked examples take the minimum as 5% of the balance or RM 50, whichever is higher.

For card purchases, the most a bank can charge depends on your record:

• 15% a year if you paid at least the minimum on time for 12 months in a row
• 17% a year if you paid on time in at least 10 of the last 12 months
• 18% a year for everyone else

Cash advances: up to 18%. A bank can charge less. If you carry nothing forward from the last statement, new purchases get at least 20 days free of interest.

What paying only the minimum does

Banks must print a worked example on the back of every statement. For RM 3,000 at 18% a year, with nothing new bought, paying only the minimum takes 4 years and 7 months and costs RM 1,055 in interest. Paying RM 250 a month takes 1 year and 2 months, and RM 333.

We checked this with a short program, charging 1.5% a month on each statement's balance, and got the same 55 months and RM 1,055. Then we tried a fixed RM 150 every month, the same as that first minimum. The balance is gone in 24 months, with about RM 593 of interest: 31 months sooner and about RM 460 less.

The gap comes from the minimum itself. It is a share of the balance, so it shrinks as the balance shrinks: RM 150, then RM 144.75, then RM 139.68. A fixed RM 150 does not slow down.

The statement's front page must also carry a bold warning box, and the year's last statement must show how long your own balance would take to clear, and at what cost, if nothing new goes on the card.

Other rules

• A main cardholder must be at least 21 and earn at least RM 24,000 a year.
• If you earn RM 36,000 a year or less, you can hold cards from at most two banks, and each can give you a limit of at most two times your monthly pay. On RM 2,500 a month, that is RM 5,000 per bank. These income rules do not apply to retirees.
• A bank that offers to raise your limit needs your yes first. It must not raise the limit of someone who habitually pays only the minimum in a way that shows trouble keeping up.
• Card sellers must not pressure or mislead you, and must point out the conditions on any free gift. If it is shown you were pushed into signing, you can withdraw even after the card arrives.

When it goes on for a year

Automatic Balance Conversion is for people who pay a little for a long time. If you earn up to RM 5,000 a month, have carried a balance month after month for 12 months, and paid on average 10% or less of it each month, the bank must turn it into a three-year loan at an effective rate of no more than 13% a year.

The bank must tell you at least two months ahead. The first time, you have 30 days to opt out, and you can settle the loan early, both with no penalty.

For anyone whose card debts are getting heavy, AKPK, the credit counselling agency set up by Bank Negara in 2006, offers its help free of charge: akpk.org.my.

The cards in DECADES

"Pre-approved, sir!" can turn up once a player is 21 and has a job, the same age and income test real banks use. It opens like this, word for word:

A booth outside the supermarket is run by someone your age with a quota to hit. Free luggage, no fee for the first year, and your name is almost on the card.

Sign up "mostly for emergencies", and you are approved in four minutes, with a limit larger than everything you have ever saved. The lesson line is the same RM 3,000 sum: over four years and about RM 1,000 in interest. Say no thanks, and he is smiling at the person behind you before you finish. "The luggage was never the product. You were."

"Debit or credit?" is about a RM 189 laptop bag. Pay by debit, and it is over that day. Clear the credit card in full, and the interest is RM 0.00. Pay only the minimum, and the RM 189 "becomes a RM 50 a month guest in your house". Then one of three things happens: the balance never reaches zero, so new purchases pay interest from day one; a letter offers to raise your limit from RM 3,000 to RM 5,000 with just your yes; or a RM 50 payment is forgotten, and a late charge and a line in your credit report follow.

Two parts match the real rules: the 20 free days, and the yes for a higher limit. In real life, the rule above on minimum-only payers applies too.

"The line at the bottom" comes later, to a player who has carried a balance for years: RM 8,000, a minimum of RM 400, and 18% in the small print. Pay the RM 400, and RM 120 of it was interest, so the balance fell by only RM 280. Read the small print first, and the line the regulator requires says about seven years, with over RM 3,000 in interest. Our program, using Bank Negara's method, gets 83 months and about RM 3,200.

The game is fiction

DECADES is a game. The booth, the bank, the limits and every number on its cards are made up, and the game's rules are not the real rules of any bank. Nothing here is advice about your own money. For anything real, go to the official pages linked above.

Play it

See how long a RM 189 bag can follow you. Play DECADES in your browser, free and with no sign-up.

Teachers can use these cards in class with the 40-minute lesson on the teachers page.