What this calculator answers

Credit card minimum payments are designed by lenders to keep you in debt as long as legally allowed. A typical minimum is the larger of 25 dollars or 2 percent of the balance, which means the smaller the balance gets, the slower you pay it down, and the longer the lender collects interest. This tool calculates exactly how many months and how many interest dollars you would owe if you only ever pay the minimum.

How the math works

Each month the card accrues interest on the prior balance at your APR divided by 12. The minimum payment is recalculated based on the new (slightly lower) balance, so each month's payment shrinks along with the balance. The result is a long, slow decline that takes decades to reach zero. The tool runs the math month by month and reports the total months to payoff and total interest paid.

When to use it

• You currently pay only the minimum on a credit card and want to see the true cost of that habit.
• You are considering whether to make a one-time lump sum payment toward a high-rate balance and want to see the lifetime interest it would avoid.
• You want to demonstrate to a family member or teenager why credit card minimums are a long-term trap.
• You are comparing how much faster a fixed payment of 100, 200, or 300 dollars a month would clear the same balance.

Common mistakes

• Assuming the minimum is a 'fair' payment. The minimum is the legal floor, designed to maximize the lender's interest income, not your financial health.
• Believing that the minimum will pay off the card 'eventually.' At typical credit card APRs, a 5,000 dollar balance on minimums takes 25 to 30 years and costs more than triple the original balance.
• Adding new charges while paying only the minimum. New charges effectively reset the clock and extend the payoff indefinitely.
• Confusing the statement balance with the minimum payment. The statement balance is what you owe in full; the minimum is what avoids late fees but not interest.

A worked example

A 5,000 dollar balance at 22 percent APR with a minimum payment of 2 percent of the balance (or 25 dollars, whichever is larger) takes roughly 27 years to pay off via minimums alone, with total interest paid of about 7,800 dollars. The same 5,000 dollars paid off with a fixed 150 dollar monthly payment clears in just over 4 years with total interest of about 2,300 dollars. The minimum-only path costs you 5,500 dollars more and 23 extra years.

Frequently asked questions