Most minimum payments are calculated as a percentage of the principal balance owed. Typical minimum payments are two to four percent of your principal balance or a fixed floor rate, whichever is greater. Making minimum payments does:Prevent late feesPrevent derogatory marks on your credit scoreKeep you in good standing with your creditorMaking minimum payments does not:Save money on your debtPay off debt fasterLower your DTI quickly to improve creditworthinessMinimum payments are not consumer friendlyAt first, minimum payments seem like a good deal. What happens if you pay more than the minimum payments? These approaches can help create a clearer plan for managing balances when minimum payments are the only affordable short-term option.