Minimum Payment Calculator
Enter your balance and APR to see how long it really takes to pay off making only minimum payments — and how much interest you'll pay.
Last updated: April 2026
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Why Paying the Minimum on Your Credit Card Is So Costly
The minimum payment on a credit card is one of the most expensive financial traps in personal finance. Card issuers are legally required to disclose the cost of minimum-only payments on your statement — yet most cardholders still underestimate how much they're paying to borrow their own money back.
Here is the math: at 20% APR on a $5,000 balance, your monthly interest charge is approximately $83. If your minimum payment is 2% of the balance ($100), only $17 goes toward reducing the principal. The remaining $83 is pure interest. As the balance slowly falls, so does the minimum payment — meaning you make smaller and smaller payments on a balance that declines at a snail's pace. The full payoff can take 22 years and cost over $5,000 in interest — more than the original balance.
At higher APRs (25–30%, which are now common for new cardholders), the situation is worse. A 2% minimum payment at 25% APR barely covers the monthly interest. The effective principal reduction each month is measured in single-digit dollars, and it takes decades — not years — to clear the balance under minimum-only payments.
The solution is consistent overpayment. Paying $50 extra per month on a $3,000 balance at 22% APR reduces the payoff time from 15 years to under 3 years and saves over $2,500 in interest. You don't need to pay the full balance every month to make a meaningful difference — even a modest fixed payment above the minimum has an outsized impact because interest compounds monthly.
If your balance is large or your APR is high, a 0% balance transfer card can stop the interest clock entirely. Most 0% intro period cards offer 15–21 months of interest-free payments, which — if you make fixed monthly payments toward the principal — can eliminate your debt years sooner than staying on your current card.
Frequently Asked Questions
- What happens if I miss a minimum payment?
- Missing a payment triggers a late fee (typically $30–$40), and your APR may jump to a penalty rate of 29.99% or higher. It also hurts your credit score — payment history is the largest single factor in your FICO score at 35%. Two or more missed payments can lead to account closure or collection. Always pay at least the minimum, even if it means delaying other spending.
- Does paying the minimum hurt your credit score?
- Paying the minimum doesn't hurt your score directly — on-time payments are reported as current regardless of the amount. However, carrying a high balance relative to your limit (high credit utilization) does suppress your score. Paying down the balance, even gradually above the minimum, improves your utilization ratio and benefits your credit score.
- What's the fastest way to pay off credit card debt?
- The fastest approach financially is the debt avalanche: target the highest-APR card first while paying minimums on all others. Once it's paid off, redirect that payment to the next highest-APR card. If you have multiple cards, a 0% balance transfer can consolidate debt and eliminate the interest clock temporarily, allowing your full payment to reduce principal.