Avoid revolving minimum card payments and borrowing to fund consumption
Minimum repayment is a loan, not a discount, and the historical daily rate annualizes to roughly 18%. The interest-free period is lost and interest accrues on outstanding principal. Judge the annualized rate; China's central bank requires prominent annualized disclosure rather than only a daily rate or repayment amount.
What it takes
No extra spending. Reserve enough cash for full repayment; resist spreading an unaffordable purchase into installments.
What you may gain
Before the reform, card overdraft rates were capped at 0.05% daily, with a floor at 70% of that ceiling. Multiplying 0.05% by 365 gives 18.25% simple annual interest, excluding compounding. From 2021, rates became negotiated between issuer and holder. Minimum repayment leaves outstanding principal accruing daily interest and forfeits the interest-free period. The 2020 central-bank notice requires clear annualized rates and prohibits displaying only daily rates or daily repayment amounts.
Context & considerations
The 18.25% figure is 0.05%×365, without interest on interest; monthly compounding raises it. Some banks offer discounts, so use the rate on your own statement. If short of cash, the source recommends lower-rate regulated credit over repeatedly rolling minimum payments.
Research & references
People's Bank of China (2020). Notice on market-oriented reform of credit-card overdraft interest rates, Yinfa [2020] No. 327. https://xining.pbc.gov.cn/zhengwugongkai/4081330/4406346/4693549/4159909/index.html