Minimum Payment Calculator

See the shocking truth about paying only the minimum on your credit card. Find out how long it will really take and how much you'll pay in interest.

Last Updated:
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Most cards require 1-3% of the balance

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The minimum payment won't go below this (typically $25-35)

Why Minimum Payments Keep You in Debt

⚠️ The Math Trap

  • Interest Dominates: Most of your payment goes straight to the bank's profit, not your balance.
  • Negative Amortization: If interest exceeds your payment, your debt grows automatically.
  • Decades of Debt: Small balances can take 15-30+ years to clear at minimum rates.
Balance: $5,000
Min Payment: $100 (2%)
Interest Cost: ~$83

Only $17 goes to principal!

🚀 The Fix: Pay More

  • Double the Impact: Adding just $50/mo can cut payoff time by half or more.
  • Snowball Method: Focus all extra cash on the smallest balance first for quick wins.
  • Avalanche Method: Attack the highest interest rate first to save the most money mathematically.
Start Your Debt-Free Plan →

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Frequently Asked Questions

Why is only paying the minimum payment bad?
Minimum payments are designed to maximize interest revenue for credit card companies. They typically cover interest plus only 1-2% of principal, meaning you stay in debt for decades and pay 2-3x your original balance in total.
How do credit card companies calculate minimum payments?
Most cards calculate minimum payments as the greater of: a flat fee ($25-35) OR a percentage of your balance (typically 1-3%). This percentage often barely exceeds the monthly interest charge.
What is negative amortization?
Negative amortization occurs when your payment doesn't cover the monthly interest charge, causing your balance to grow even as you make payments. This can happen with very low minimum payments on high-APR cards. Learn more about escaping this trap.
How long does it take to pay off $5,000 with minimum payments?
At 20% APR with 2% minimum payments, $5,000 would take approximately 30 years to pay off and cost over $8,000 in interest alone. Doubling your payment to 4% cuts this to under 5 years.
Does paying only the minimum hurt my credit score?
Yes, indirectly. While making the minimum payment on time keeps your account in "good standing," it keeps your overall balance high. This negatively impacts your Credit Utilization Ratio (the amount of debt you have compared to your credit limits). A high utilization ratio is one of the fastest ways to lower your credit score.
What happens if I pay more than the minimum payment?
Every dollar you pay above the minimum goes directly toward reducing your principal balance, not toward interest. This creates a compounding effect: a lower balance next month means lower interest charges, which means even more of your payment goes toward the principal. Even an extra $25 or $50 a month can shave years off your payoff timeline.
Is it better to pay the minimum on multiple cards or pay off one first?
You must ALWAYS pay at least the minimum on every card to avoid late fees and credit damage. However, any extra money should be targeted at one specific card. Mathematically, putting all your extra cash toward the card with the highest interest rate (the Avalanche Method) will save you the most money.