The Federal Office Of Comptroller recommending in 2005 that a different minimum credit card payment formula be used which forces payment towards principle. Despite contrary popular belief the formula is not based on a flat percentage of total balance as some erroneously report.
This is what makes up the formula that is most prevalent for 2011.
- accrued interest during the billing period
- applicable fees including but not limited to those for late payments and exceeding credit limit
- 1% of the total balance
Note that this payment formula for credit cards was only a recommendation and the issuer may use a different formula at their discretion.