New Delhi, Oct. 5 -- Credit cards offer a convenient way to manage purchases or unexpected expenses without an immediate cash outflow. A big benefit is that you can effectively borrow money without paying any extra interest, as long as you repay the entire outstanding amount by the payment due date.

However, this benefit can be misunderstood. Many users assume that they can avoid interest by only paying the minimum amount due, which refers to the smallest payment your bank requires you to make each month on your credit card bill to keep your account active and avoid late fees.

The minimum amount due on a credit card bill usually ranges from 5% to 10% of the total outstanding balance, including any accrued interest, fees or new charges, ...