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Short answer: The minimum amount due is the smallest payment that keeps your credit card account in good standing and avoids a late fee. The total amount due is your whole statement balance. Pay the total by the due date and you avoid interest on your purchases. Pay only the minimum, or anything less than the total, and the bank charges interest on what is left. In the Philippines that interest is capped at 3% a month, which is 36% a year, under BSP Circular No. 1165.
A lot of cardholders treat the minimum like the “real” bill. It’s not, and it is one of the most expensive habits in personal finance. This guide explains how the two amounts work, how much paying only the minimum can cost, and what fees to watch for, using UnionBank’s published rates as the example. Every figure below was checked against official sources on October 31, 2026.
What is the minimum amount due on a credit card?
The minimum amount due (MAD) is the least you must pay by the due date to stay current. Banks compute it with a formula printed on their fee schedules. UnionBank uses two formulas, depending on the card:
- Older and standard cards (such as Visa Classic and Gold): the higher of ₱400 or the sum of any past-due amount, overlimit amount, billed installment amortization and 4% of the remaining total amount due. If your total due is ₱400 or less, you pay the total.
- Newer cards (including Rewards, Cash Back, Miles+, Reserve and the U cards): the higher of ₱500 or the sum of past-due amounts, billed installment interest, billed interest, billed late charges, 1% of the remaining total amount due and 1% of unbilled installment principal. If your total due is ₱500 or less, you pay the total.
Notice how small that 1% or 4% slice is. The MAD is built to keep you from defaulting, not to clear your debt.
What is the total amount due, and why should you pay it in full?
The total amount due is everything you owe on your statement: new purchases, installment amortizations billed that month, fees and any interest. UnionBank’s application page states that paying the minimum amount due, or anything less than the total amount due, automatically incurs interest. Paying the full amount by the due date is how you use a card without paying interest on your purchases. Paying in full every month is also the habit that builds a clean credit record, which we cover in our first credit card guide.
How is credit card interest computed in the Philippines?
Since February 10, 2023, BSP Circular No. 1165 has capped the interest or finance charge on unpaid credit card balances at 3% a month (36% a year), up from the 2% cap set in 2020. The same circular caps the monthly add-on rate on card installment loans at 1% and limits cash advance charges to a processing fee of at most ₱200 per transaction. The BSP reviews the caps every six months.
UnionBank’s fees page (as of July 2025) lists a retail monthly effective interest rate of 3.00%, computed on the unpaid balance from your previous statement and compounded monthly. Its cash advance effective rate is 3.04% a month, which already includes the ₱200 service fee. Your actual rate for the month appears on your statement of account.
How much does paying only the minimum really cost?
Here is a rough estimate we ran ourselves. It is simplified and is not UnionBank’s computation: it assumes a ₱20,000 balance, no new purchases, a flat 3% monthly interest and a minimum of 4% or ₱400, whichever is higher.
| Payment habit | Time to clear ₱20,000 | Interest paid (our estimate) |
|---|---|---|
| Pay the total amount due | One statement | ₱0 on purchases |
| Pay only the minimum every month | About 106 months (almost 9 years) | About ₱33,000 |
In other words, you would pay back more than two and a half times what you borrowed. On a ₱50,000 balance, the same estimate stretches to about 15 years. Real numbers will differ because of new purchases, fees and how your bank counts days, but the lesson holds: aray talaga ang minimum-only habit.
What happens if you miss the minimum amount due?
Missing the MAD costs more than interest. UnionBank lists a late payment charge of ₱1,500 or the unpaid minimum amount due, whichever is lower, for most of its cards. A UnionBank advisory says this rule took effect on November 4, 2024, and that the fee is based on the date your payment transaction is made. Going over your limit adds an overlimit fee (₱1,500 or the highest overlimit amount, whichever is lower, on newer cards). Late payments can also hurt your credit standing with every lender you apply to later.
Payments made through other channels can take time to post, so pay a few days early. You can pay many credit card billers through e-wallets; see how to pay bills with Coins.ph.
What if you can’t pay the full balance this month?
- Pay as much above the minimum as you can. Interest is charged on what remains, so every extra peso helps.
- Look at installment conversion. Converting a big purchase into fixed monthly installments can cost less than revolving at 3% a month, since the BSP caps the add-on rate at 1% a month. UnionBank lists a ₱350 processing fee for EasyConvert, so compare the total cost first.
- Avoid cash advances for bills. They carry both the ₱200 fee and interest.
- Stop adding new charges until the balance is gone, and use windfalls like your 13th month pay to clear it.
- Build a buffer. An emergency fund keeps surprise expenses off your card.
Choosing the right card also helps. Compare annual fees and perks in our UnionBank credit card comparison, and if you travel, read the cheapest way to spend money abroad before swiping overseas.
Frequently asked questions
Do I pay interest if I pay the minimum amount due?
Yes. Paying the minimum avoids a late fee, but interest is charged on the unpaid balance. Paying the total amount due by the due date avoids interest on purchases.
What is the maximum credit card interest in the Philippines?
BSP Circular No. 1165 caps credit card interest at 3% a month, or 36% a year, effective February 10, 2023.
How much is UnionBank’s late payment fee?
For most UnionBank cards, it is ₱1,500 or the unpaid minimum amount due, whichever is lower, per its fees page.
Is paying the minimum bad for my credit score?
Paying at least the minimum on time keeps your account current. Carrying a high balance month after month is costly, though, and can make lenders see you as a bigger risk.
Sources
- Bangko Sentral ng Pilipinas, Circular No. 1165, Series of 2023 (checked October 31, 2026)
- EastWest Bank, FAQs on BSP Circular No. 1165 (checked October 31, 2026)
- UnionBank, Credit card fees and charges (as of July 2025, checked October 31, 2026)
- UnionBank, credit card application page interest disclosure (checked October 31, 2026)
- PR Station, Advisory on UnionBank credit card late payment charge (checked October 31, 2026)
- Moneymax, Minimum amount due on credit cards and UnionBank credit card fees and charges (checked October 31, 2026)
This guide is general information, not financial advice. The payoff figures are our own simplified estimate. Rates and fees change, so check your statement and your bank’s current fee schedule.
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