SBI card's new 'minimum due' rule from July 15: What cardholders must know

The number of credit card users is currently increasing. Many of us make the minimum payment when paying our credit card bills. However, SBI has recently made key changes in this regard. 

What are the new SBI credit card rules?

From July 15, 2025, State Bank of India Credit Cards (SBI Cards) is changing the way it calculates the Minimum Amount Due (MAD). The minimum amount that must be paid each month on the amount used on the credit card is called the Minimum Amount Due.

According to the new policy, the MAD is expected to be slightly higher. Experts say this is likely to have a greater impact on those who frequently pay the minimum amount.

What is Minimum Amount Due?

When using a credit card, if you are unable to pay the entire outstanding balance, a minimum payment option is available. This is called the Minimum Amount Due. By using this method, you can avoid late payment charges. But interest continues on the remaining balance.

What will the new MAD formula be like?

As per the new formula effective from July 15, 2025, MAD will be calculated as follows: 100% GST, 100% EMI Amount (if any), 100% Fees / Other Charges, 100% Finance Charges (interest). If there is an overlimit, that amount will be 2% on the remaining retail outstanding. For example, suppose a user's credit card outstanding is Rs. 1,34,999.60. His finance charges are Rs. 11,972.18, fees are Rs. 2,700, and GST is Rs. 2,640.99.

However, in the new Minimum Amount Due (MAD) method, GST is Rs. 2,640.99, fees are Rs. 2,700, finance charges are Rs. 11,972.18, and 2% on retail outstanding is Rs. 2,699.99, so the total MAD is Rs. 20,013.16. In the old method, it would be enough to pay Rs. 17,313.17. It is Rs. 2699 more than the old method.

What is revolving credit?

If you don't pay the entire outstanding balance and only pay a certain amount and postpone the remaining amount to the next month, it is called revolving credit. This increases interest every month, and the debt keeps increasing. Credit score is affected.

Payment settlement order has also changed

The payment settlement procedure implemented in cases where credit card payments cannot be made has also been changed. As part of this, changes have been made to aspects like GST, EMI amount, fees, finance charges, balance transfer, retail expenses, and cash advance. By doing this, the items that generate more interest are cleared first. This reduces the interest on the outstanding balance.

What are finance charges?

If you don't pay the entire outstanding balance, daily interest is charged on the remaining amount. This is approximately 3% per month (36-40% per annum). For example, if you have an outstanding of Rs. 10,000, the interest will be Rs. 300 per month. In the old method, it was not necessary to pay this interest amount. But now 100% has to be paid.

How will these changes affect users?

Due to these new regulations brought by SBI, a higher Minimum Amount Due will have to be paid. Items like finance charges and fees will have to be cleared every month. This prevents interest from increasing and reduces debt quickly. Disciplined and timely payments improve the credit score.