0% credit card minimum monthly payments - calculated ?

equityone

How do banks calculate the minimum payments on 0% balance transfer cards over the length (mths) of their offer. 
Excel Formula example ? 

TadleyBaggie

Isn't just a simple percentage of the outstanding balance?

With MBNA it is 2.5% or £25, whichever is higher.

surreysaver

If, for example, the statement balance is £5,000 and the minimum payment is 2.75%, the Excel formula would be

=Sum(5000*.0275)

km1500

why sum ? isn't it just =5000*0.025?. Or is sum needed?

CliveOfIndia

TadleyBaggie said:

Isn't just a simple percentage of the outstanding balance?

With MBNA it is 2.5% or £25, whichever is higher.

Exactly this.  All banks will have different figures, but it's always "x% or £y, whichever is higher".  The figures they use will be clearly stated on your statement.

And each month the minimum payment will decrease ever so slightly as you've paid off a little bit of the capital (assuming no other spending on the card, and assuming you've not got down to the "fixed sum" level).

double_dutchy

km1500 said:

why sum ? isn't it just =5000*0.025?. Or is sum needed?

Agreed, you don't need SUM function. If you want you can write a formula like this:

=5000*2.75%

sausage_time

Excel seems overkill here (unless you are working out the reducing minimum over several months), for example...



As formulae..