Minimum Payment Calculator
Discover the true cost of making only minimum payments on your credit card. See how much you can save by paying even slightly more each month.
Minimum Payment Calculator
Credit Card Details
Current minimum: $100.00
Compare with Higher Payment
Enter an amount higher than minimum to see the impact
💡 Quick Suggestions
Comparison Results
Paying Minimum Only
Paying More
💰 Your Savings by Paying More
Understanding Minimum Payments
⚠️ The Minimum Payment Trap
Credit card issuers love minimum payments because they maximize their profit from interest charges. While paying the minimum keeps you in good standing, it can extend your debt for decades and cost you thousands in interest.
Real-World Example:
A $5,000 balance at 18.99% APR with 2% minimum payments takes 30+ years to pay off and costs $9,332 in interest — nearly 3× the original balance!
💡 How Minimum Payments Are Calculated
Most credit cards calculate minimum payments using one of these methods:
- 1. Percentage method: 1-3% of your balance, with a floor (usually $25-35)
- 2. Percentage + interest: 1% of balance + monthly interest charges
- 3. Fixed dollar amount: Flat $25-35, whichever is greater
Check your credit card statement's "Minimum Payment Warning" box to see your card's calculation method.
🚀 The Power of Paying More
Even small increases to your payment can dramatically reduce payoff time and interest costs:
Can cut payoff time by 60-70%
Can cut payoff time by 75-85%
Prevents shrinking payments as balance drops
📋 Required by Law: Minimum Payment Warnings
Since the Credit CARD Act of 2009, issuers must disclose on your statement:
- • How long it will take to pay off your balance making only minimum payments
- • Total amount you'll pay (principal + interest)
- • A 3-year payoff amount showing how much to pay monthly to be debt-free in 36 months
Look for this box on your statement! It provides personalized calculations for your specific balance and APR.
Frequently Asked Questions
How long to pay off credit card with minimum payment?
For a typical credit card with 18-20% APR and a 2% minimum payment, it can take 20-30+ years to pay off your balance, depending on the amount owed.
Examples (18.99% APR, 2% minimum):
- • $1,000 balance: 6.5 years, $697 in interest
- • $5,000 balance: 30+ years, $9,332 in interest
- • $10,000 balance: 40+ years, $23,119 in interest
Use our calculator above to see your specific situation with your exact balance and APR.
What happens if I only pay the minimum?
When you only pay the minimum:
- 1. Most goes to interest: Typically 70-90% of your minimum payment goes to interest, with only 10-30% reducing your principal balance.
- 2. Payment shrinks over time: As your balance decreases, so does your minimum payment, extending payoff time even further.
- 3. Credit utilization stays high: High balances relative to limits hurt your credit score (aim for under 30%).
- 4. You stay in good standing: The only benefit — you won't get late fees or hurt your payment history.
Should I pay more than the minimum payment?
Absolutely yes — even small increases make a huge difference. Here's why:
✓ Benefits of Paying More
- • Save thousands in interest
- • Become debt-free years faster
- • Improve credit utilization ratio
- • Build better financial habits
- • Reduce financial stress
💰 How Much More to Pay?
- • Start: 2-3× the minimum
- • Better: Fixed amount (doesn't shrink)
- • Best: Pay off statement balance in full
- • Any extra helps: Even $10-20 more makes a difference
Tip: Set up automatic payments for a fixed amount above the minimum so you're consistent even when your minimum payment decreases.
Danger of only paying minimum — what's the real cost?
The "minimum payment trap" costs Americans billions in unnecessary interest every year. Here's a shocking comparison:
Scenario: $8,000 balance, 21.99% APR, 2% minimum payment
Paying Minimum Only:
- • Time: 50+ years
- • Interest: $22,367
- • Total paid: $30,367
Paying $250/month:
- • Time: 4.2 years
- • Interest: $4,542
- • Total paid: $12,542
Savings: $17,825 and 45+ years by paying a fixed $250/month!
The hidden danger: By the time many people realize the trap, they've already paid thousands in interest with barely a dent in their principal balance.
Calculate total interest from minimum payments?
To manually calculate total interest from minimum payments, use this formula:
Total Interest = (Monthly Payment × Number of Months) - Original Balance
However, this is complex because:
- • Minimum payment decreases as balance drops (if percentage-based)
- • Interest is compounded monthly
- • You need to calculate month-by-month until balance reaches $0
Easier solution: Use our calculator above! It handles all the complex calculations automatically and shows you:
- ✓ Exact payoff timeline
- ✓ Total interest charges
- ✓ Total amount you'll pay
- ✓ Savings from paying more