Credit Card Minimum Payment Calculator
The minimum is a percentage of the balance, so it falls as the balance does. That is what stretches the payoff out for decades — the payment retreats exactly as fast as you advance.
Paying only the minimum clears it in
75.6years
- First minimum
- $122.20
- Interest this month
- $110.00
- Minimum only — time
- 75 years 7 months
- Minimum only — interest
- $44,974.12
- Holding that payment — time
- 10 years 7 months
- Holding that payment — interest
- $9,499.21
- Simply not letting the payment fall — holding it at $122.20 instead of following the minimum down — clears the balance 65 years sooner and saves $35,474.91.
- The minimum is a percentage of the balance, so it falls as the balance does. That is what stretches the payoff out for decades: the payment retreats just as fast as you advance.
- Paying the minimum is not a plan, it is the absence of one. Any fixed payment at all — even the same amount you are paying today — transforms the outcome.
About the minimum payment trap
A minimum payment is typically two per cent of the balance, or a small fixed floor, whichever is larger. It is designed to be affordable, and the mechanism that makes it affordable is what makes it ruinous: as the balance falls, so does the required payment, so progress slows exactly as it should be accelerating.
On $6,000 at 22%, the first minimum is $122.20 against $110 of interest that month. Twelve pounds of that payment reaches the principal. Follow the minimum down from there and the card takes over seventy-five years to clear and costs $44,974 in interest — more than seven times what was borrowed.
The fix costs nothing. Simply hold the payment at today's minimum instead of letting it fall — the same $122.20, every month, until it is gone. That clears the balance in ten years and seven months and costs $9,499. You pay the same amount this month and save $35,475.
That is the single most valuable thing on this page, and it requires no extra money at all. Anything above the minimum accelerates it further, but the fixed payment on its own does most of the work.
What it works out
- How long a card takes on minimum payments alone
- What holding the payment steady instead achieves
- The interest either way
- Any minimum percentage and floor
The formula
Minimum = max(Floor, (Balance + Interest) × Minimum %) — recalculated every month, on a falling balance
The recalculation is the whole problem. On $6,000 at 22%, this month's interest is $110 and the minimum is $122.20 — so $12.20 comes off the balance. Next month the balance is $5,987.80, so the minimum is $121.95, so slightly less again reaches the principal.
The payment shrinks in step with the balance. Early on almost all of it is interest, and it stays that way for years, because the two fall together. On these figures the card takes 907 months — over seventy-five years — and costs $44,974 in interest on $6,000 borrowed.
Now hold the payment fixed at $122.20 rather than following the minimum down. Nothing else changes; you pay exactly the same amount this month. The balance clears in 127 months and the interest is $9,499.
Sixty-five years and $35,475 saved, for no additional money — simply for not letting the payment fall. It is the highest-return decision available to anyone carrying a card balance.
- Balance
- What is owed. The minimum is recalculated against it every month.
- Minimum %
- Usually one to three per cent of the balance, set by the issuer.
- Floor
- A fixed amount the minimum never drops below, often $25 or $35.
- Interest
- Charged monthly on the balance, and on most cards it is added before the minimum is worked out.
A worked example
A $6,000 balance at 22%, with a minimum of 2% of the balance or $25, whichever is more.
That works out to 75.6 years.
- First minimum
- $122.20
- Interest this month
- $110.00
- Minimum only — time
- 75 years 7 months
- Minimum only — interest
- $44,974.12
- Holding that payment — time
- 10 years 7 months
- Holding that payment — interest
- $9,499.21
Questions
How long does it take to pay off a credit card with minimum payments?
On $6,000 at 22% with a 2% minimum, over seventy-five years — and $44,974 of interest on $6,000 borrowed. The minimum falls with the balance, which is what stretches it out.
Why does paying the minimum take so long?
Because the minimum is a percentage of the balance, so it drops as the balance does. The payment retreats at the same rate you advance, and the proportion going to interest barely improves for years.
What is the simplest way to fix it?
Keep paying today's minimum every month instead of letting it fall. On these figures that alone takes the payoff from seventy-five years to ten and a half, and saves $35,475 — for exactly the same payment this month.
How is the minimum payment calculated?
Usually one to three per cent of the balance including that month's interest, or a fixed floor of around $25 to $35, whichever is larger. The exact formula is on your statement and varies by issuer.
Does paying the minimum hurt my credit score?
Paying it on time is fine for payment history, which is the largest factor. The damage comes from the balance staying high, since credit utilisation is heavily weighted and a card kept near its limit for years holds a score down.
Is the minimum ever the right thing to pay?
Temporarily, when money is genuinely short and the alternative is missing a payment — a missed payment is far worse. As a settled approach it is not a plan, it is the absence of one.
What if the interest is more than the minimum?
Then the balance grows every month and the card never clears at all. That happens at very high rates or with a low fixed minimum, and it is the point at which the priority is talking to the issuer rather than calculating anything.