Paying only the minimum due on a Nepali credit card: the 18-month math

A colleague put Dashain on her card. New phone for her father, two flights to Bhairahawa and back, the gifts, about Rs 60,000 by Kartik. The statement said "Minimum amount due: Rs 6,120" and she paid that, feeling responsible. In Mangsir it said Rs 5,618. By Chaitra it was under Rs 4,000 and she assumed the card was nearly clear. It was not. She had paid the bank close to Rs 30,000 by then and still owed over Rs 35,000.

Nothing in that sequence was hidden. The minimum due is printed on every statement, and the 2% is in every tariff sheet. The problem is that the two numbers interact in a way no statement explains: the minimum shrinks every month precisely because it is a percentage, which is what keeps the balance alive. This post runs that interaction to the end, bank by bank, and then lays out the three exits.

What "minimum due" is at each bank

The minimum is not a regulatory number. Each bank sets it in its tariff, and the Nepali convention has settled on one formula.

Sources are the banks' own pages and tariff sheets: NIC Asia's Standard Tariff of Charges, April 2026, Everest, Nepal Bank, Prabhu and its July 2025 tariff, NMB, Global IME's September 2026 schedule, Laxmi Sunrise and its tariff, Machhapuchchhre, and Kumari. Nabil's and NMB's monthly rates come from an aggregator table because their card tariff pages were not reachable; confirm on your own statement.

Two things stand out. The 10%-or-Rs-1,000 formula is near universal, so the trap is the same card to card. And the two banks that let you pay 5% are not offering a kinder product. A lower minimum keeps more of the balance on the book for longer, which is the bank's revenue line.

For the fuller picture of annual fees, forex caps and the four cases where a card genuinely earns its keep, see when a credit card makes sense in Nepal. This post is only about what happens after the grace period is gone.

Why the first short payment is the expensive one

The 45-day grace period is the whole value of a credit card, and it has one condition: the statement is paid in full. NIC Asia's helpdesk puts the consequence in one line: interest is charged at 24% a year and "shall be calculated from the transaction date if payment not made on payment date." Global IME's own card guide says the same thing: interest "starts accumulating, usually from the date of the original transaction, not from the day the grace period ends," and "never assume that paying the minimum means there will be no additional cost."

Read that carefully. Paying Rs 6,120 of a Rs 61,200 statement does not mean interest on the Rs 55,080 you did not pay, from the due date forward. It means the bank goes back to each swipe in Asoj and Kartik and charges 2% a month from that day on the full amount, then keeps charging on whatever remains. Cash advances never had grace in the first place: Everest states interest on ATM withdrawals runs "from the date of the transaction itself," plus a fee of Rs 100 to Rs 500 and 2% to 2.5% depending on the bank. And NRB's Unified Payment System Directive 2082, issued in April 2026, caps card cash withdrawals at 10% of the approved limit, so the cash route is small by design.

One claim to retire: there is no NRB ceiling on credit-card interest. None of the directive coverage, bank tariffs or NRB notices contains one, and the banks price between 1.5% and 2.5% a month. The "20% cap" that appears in some Nepali articles has no source behind it.

The 18-month table

Take Rs 60,000, 2% a month, a 10% minimum, and no new spending. Each month the bank adds 2% interest, the statement is the balance plus interest, the minimum is 10% of that, and the rest rolls. This is standard reducing-balance arithmetic; the first month in real life is slightly worse because the interest runs from the transaction dates rather than from the statement date, and the annual fee is on top.

Eighteen months in: Rs 58,635 paid, Rs 11,497 of it interest, Rs 12,862 still owed. The balance has fallen by 79% while the payments have added up to 98% of the original debt. From here the minimum keeps shrinking until the statement drops below Rs 10,000, when the Rs 1,000 floor takes over and the end finally comes into view. Full payoff is month 33, total interest Rs 13,461.

The 10% minimum looks painless because the first few payments are large, which flatters the early balance. The last twenty months are where the money quietly goes.

Three balances, two minimums

The same arithmetic across the balances people actually carry, and across both minimums on offer:

Halving the minimum roughly doubles the time and more than doubles the interest. A Rs 1 lakh balance at 5% takes six and a half years, during which the card has charged Rs 57,397 for the privilege. At Laxmi Sunrise's 2.25% the Rs 60,000 case runs to Rs 15,557 of interest at the 10% minimum; at Prabhu's 2.5% it is higher again. None of these rows includes a single new purchase, and that assumption is the one that fails in practice, because a card with a running balance has no grace on anything new.

A Nepali-language explainer that circulated in Shrawan 2083 told readers the minimum is "about 5% of the total outstanding" and that banks charge "30 to 40 percent a year." Both figures match Indian card terms, not Nepali tariffs; the Nepali minimum is 10% and the rate is 24% to 30%. Lower rate, higher minimum, still a trap.

What missing the minimum adds

Paying the minimum keeps the account current. Paying less than the minimum, or nothing, starts a second clock.

The late fee lands first, and it varies more than the interest does: Rs 250 at Everest, Rs 300 at Nepal Bank, Rs 500 at Prabhu, Rs 750 at Kumari, and at NIC Asia 1% a month of the balance on top of the 2% interest, which turns a 24% card into a 36% one. The credit-bureau consequence follows. NRB's 2019 amendment to the Unified Directives required banks to report credit-card limits above Rs 1 lakh to the Credit Information Bureau and made non-repayment of a card loan grounds for blacklisting. How a CIB blacklist works and how to get off it covers the mechanics; the short version is that a card default blocks the home loan you apply for three years later.

Card default is not rare here. A banker quoted by Online Khabar in 2022 put the average credit-card default rate at around 10% before Covid and around 20% after. NRB's payment systems data counted 334,653 credit cards in circulation at mid-August 2026, and FY 2024/25 card spending of Rs 24,014 million; the market is small, but one cardholder in five slipping into arrears is a lot of statements that started with a minimum payment.

The three exits, costed

Set your own payment and ignore the minimum. This is the cheapest route by a wide margin and requires no bank product. The fixed monthly amount that clears Rs 60,000 in 18 months at 2% is Rs 4,002; total interest Rs 12,038, against Rs 13,461 and 33 months on the minimum path. The payments stay flat instead of shrinking, which is the entire difference. Set it up as a standing instruction from the salary account the day after payday, the same way pay-yourself-first automation works for savings, and stop using the card until the balance reads zero.

Convert to a card EMI product. Several banks will turn a purchase into fixed instalments for a fee rather than a rate. NIC Asia's Insta Buy runs from 3 to 24 months, with a fee of Rs 500 or a flat 2.5% at 3 months rising to Rs 8,500 or a flat 24% at 24 months; Laxmi Sunrise charges a flat Rs 500 per month of the EMI period on purchases above Rs 30,000; Kumari charges a Rs 1,000 processing fee. Run the numbers before signing. A flat 24% on Rs 60,000 is Rs 14,400, which is more than the Rs 13,461 the 10% minimum path costs, though it ends in 24 months instead of 33 and the instalment is fixed. The 3- and 6-month tiers are where these products are genuinely cheap; the 24-month tier is a slower version of the same trap with a nicer name.

Refinance with a cheaper loan. A personal loan, an overdraft against a fixed deposit, or a gold loan all price well under 24% a year; the comparison of those three has the current ranges and the fees. On Rs 60,000 the saving over 18 months is several thousand rupees, and the loan's EMI cannot be quietly reduced to a "minimum." If the card balance sits alongside other debts, snowball versus avalanche settles which one to hit first; at 24% to 30% the card is almost always the avalanche answer.

What does not work is the thing most people do: pay the minimum, keep the card in the wallet, and plan to "clear it next month." Next month's statement has new purchases on it, with no grace, and a minimum that is 10% of a bigger number.

What you actually need to know

• The minimum is 10% or Rs 1,000 at almost every Nepali bank, and it shrinks as the balance shrinks. That is what makes a Rs 60,000 balance take 33 months and Rs 13,461 of interest to clear, or 61 months and Rs 31,591 at a 5% minimum.
• One short payment ends the grace period on everything. Interest runs from the transaction date on the full balance, and new purchases accrue from day one until the card is at zero. There is no NRB cap on the rate.
• Fix the payment yourself. Rs 4,002 a month clears Rs 60,000 in 18 months for Rs 12,038. A card EMI product at the long tenures costs more than the minimum path; a personal loan or FD overdraft costs less than either.

If you want the table run on your own balance, rate and minimum, email [email protected] with the three numbers from your statement.

This post is part of the Nepal Money Basics guide — the borrowing and credit section.