The High Cost of Minimum Payments

Making only the minimum payment on your credit card is the most expensive way to pay off your debt. While it might seem manageable month-to-month, the slow pace of repayment means that interest charges will accumulate dramatically over time. As your balance slowly decreases, so does your minimum payment, trapping you in a cycle of debt for years, or even decades.

How Minimum Payments Are Calculated

Most credit card issuers calculate the minimum payment as a percentage of your balance (typically 1-3%) plus any accrued interest and fees, or a flat fee (such as $25), whichever is greater. This calculator models that common scenario to show you just how long it will take to pay off your balance and how much interest you'll pay along the way.

The Power of Fixed Payments

This calculator powerfully illustrates the benefit of paying more than the minimum. By committing to a consistent, fixed monthly payment, you accelerate your debt repayment, drastically reduce the total interest you pay, and become debt-free years sooner. Use this tool to see how even a small increase over the minimum can save you thousands of dollars.