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Credit Card Calculator
See the true cost of paying only the minimum on your credit card, and compare it to a fixed monthly payment you choose.
Your credit card
The minimum payment trap
Credit card minimum payments are designed to keep balances high. At a 23% APR with a 2% minimum payment rule, a $5,000 balance takes roughly 20 years to pay off and costs over $6,000 in interest alone. That is more than you originally borrowed. Paying even $200 a month instead cuts the timeline to about 3 years and saves thousands.
How minimum payments are calculated
Most credit cards calculate the minimum as the greater of a flat floor (typically $25 to $35) or a percentage of your outstanding balance (1% to 3%). Some issuers set it as 1% of the balance plus that month's interest charge. Because the minimum falls as the balance falls, you end up paying less and less each month. The interest compounds while the principal barely moves.
Monthly interest = balance × (APR ÷ 12)
Minimum payment = max(floor, balance × rate%)
Principal reduction = payment − monthly interest
How to get out of credit card debt faster
Pick the highest fixed monthly payment you can afford and keep it constant. Unlike minimum payments, a fixed payment clears more principal each month as interest charges shrink. The avalanche method (pay off the highest-APR card first) minimises total interest; the snowball method (pay off the smallest balance first) builds momentum. Either beats paying only the minimum.
Frequently asked questions
How is credit card minimum payment calculated?
Most issuers set it as the greater of a dollar floor (often $25 to $35) or 1% to 3% of your outstanding balance. Some also add the current month's interest charge to a small percentage of principal. The result: your minimum shrinks as the balance falls, stretching repayment over many years.
Why does paying only the minimum take so long?
At a high APR, most of each minimum payment covers interest. Only a small slice chips away at the principal. As the balance slowly drops, the minimum drops too, so you pay even less next month. At 23% APR, paying 2% of a $5,000 balance can take more than 20 years and cost more in interest than you borrowed.
How much should I pay each month?
As much as you can sustainably afford - and at least three times the minimum. Even committing to a fixed $200 or $300 per month on a $5,000 balance cuts payoff from decades to a few years and saves thousands in interest charges.
Does making minimum payments hurt my credit score?
Paying on time never hurts your score directly. But carrying a high balance relative to your credit limit (high utilisation) does lower it. Paying more than the minimum reduces your utilisation faster, which typically improves your score over time.
Is a balance transfer worth it?
A balance transfer to a 0% promotional card can save a lot of interest if you can pay off the balance before the promotional period ends (typically 12 to 21 months). Watch for transfer fees (usually 3% to 5%) and make sure you have a payment plan in place before the higher regular APR kicks in.
Estimates only, not financial advice. Confirm figures with your lender or a qualified professional before making decisions.