Banking · Retail Banking
When a Credit Card customer pays only the Minimum Amount Due (MAD) instead of the total outstanding balance, what is the immediate consequence?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The customer is immediately marked as a defaulter, and their credit score is instantly reduced by 100 points.
- 2The remaining unpaid balance attracts high finance charges (interest) calculated from the date of the transaction.✓
- 3The unused portion of the credit limit is instantly increased to promote more credit card usage.
- 4The entire remaining balance is automatically converted into a secured term loan with a fixed tenure.
Correct answer
The remaining unpaid balance attracts high finance charges (interest) calculated from the date of the transaction.
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