Minimum Payment Calculator

Credit card minimum payments are designed to keep you in debt as long as possible — that's how card issuers make their money. Most minimums are calculated as just 1-3% of your balance, which barely covers the monthly interest charge. This creates a trap called "negative amortization" where your payment doesn't actually reduce your principal debt meaningfully. On a $5,000 balance at 20% APR with a 2% minimum payment, you'd pay only $100/month — but $83 of that goes straight to interest. You're only reducing your actual debt by $17!

Credit card companies profit by extending your payoff timeline from months to decades. A $5,000 balance can take 20+ years to pay off and cost over $7,000 in interest — more than the original debt itself. The solution is simple: pay more than the minimum whenever possible. Even an extra $25-50/month can cut years off your payoff time and save thousands in interest. Use our Debt Payoff Calculator to create a plan that gets you debt-free faster, or consider consolidating your debt at a lower interest rate.