Minimum payment calculator
Paying only the minimum feels manageable because the payment keeps shrinking. That shrinking payment is exactly the trap.
Minimums only
19 yrs 4 mo
$8,414 interest · first payment $145.00
Keep paying $145.00 every month
4 yrs 9 mo
$3,203 interest, saving $5,212
Why the minimum takes so long
With a “1% plus interest” formula, your minimum covers the month’s interest and pays down just 1% of the balance. As the balance shrinks, so does the next payment, so the amount going to principal keeps shrinking too. The debt decays slowly instead of being paid off on a schedule.
Freeze the payment at today’s minimum and every dollar the minimum would have dropped by goes to principal instead. The side-by-side above shows how much that single habit is worth.
Next steps
Set a payoff date with the credit card payoff calculator, or plan all your cards together with the debt payoff calculator.
Questions people ask
How is a credit card minimum payment calculated?
Each issuer sets its own formula, shown in your cardholder agreement. A common one is 1% of the balance plus that month’s interest and fees, with a floor of about $25–$40. Others use a flat 2–3% of the balance. The minimum falls as the balance falls, which is why paying only the minimum takes so long.
How long does it take to pay off a card with minimum payments?
Often well over a decade. At 22.8% APR, a $5,000 balance on a 1%-plus-interest minimum with a $25 floor takes about 19 years and costs over $8,000 in interest. Your statement’s “Minimum Payment Warning” box, required by the CARD Act of 2009, shows the figure for your own card.
What does the minimum payment warning on my statement mean?
Under the Credit CARD Act of 2009, US card statements must show how long it will take and how much you’ll pay in total if you make only minimum payments, and what monthly payment would clear the balance in three years.
What is the simplest way to escape the minimum payment trap?
Keep paying your current minimum as a fixed amount every month instead of letting it shrink. The calculator shows how much that alone saves.