The minimum payment trap keeps millions in debt for decades. This calculator reveals how long minimum payments actually take and how much interest accumulates when you pay only the required minimum each month.
Credit card issuers calculate minimums using one of three methods: a flat percentage of the outstanding balance (typically 1–3%), the sum of interest plus 1% of principal, or a flat floor amount (usually $25–$35 for small balances). This calculator models the most common approach—percentage of balance—and recalculates the minimum each month as the balance shrinks.
Each cycle, the calculator applies the monthly interest rate (APR ÷ 12) to the remaining balance, adds it, then subtracts the minimum payment. Because the minimum itself decreases as the balance decreases, the principal reduction slows over time. This creates the "trap": early payments are reasonable, but as years pass, monthly payments dwindle to $25–$30 while interest keeps accruing.
The output shows how many years (often 15–30+) minimums take, the total interest paid (frequently exceeding the original balance), and the effective cost multiplier—how many dollars you pay per dollar of original debt. This reveals the true price of minimum-only payments.
Assuming minimums are "suggested" amounts. Minimums keep your account in good standing but are designed to maximise the lender's interest income, not help you pay off debt. Treating them as a reasonable payment strategy is the most expensive mistake consumers make.
Lowering payments as the minimum drops. When your balance falls from $5,000 to $3,000, the minimum might drop from $150 to $90. If you reduce your actual payment to $90, you have just extended your payoff by years. Lock in a fixed payment and maintain it regardless of what the statement says you "owe."
Ignoring the payoff cost on your statement. Since 2009, U.S. credit card statements must show how long minimum payments take and how much a 3-year payoff costs. Many consumers skip this box. Reading it once is often enough motivation to increase payments.
Carrying multiple cards at minimums. The compounding trap multiplies across cards. Three cards at minimums can mean 20+ years and tens of thousands in interest across the portfolio. Consolidate or target one card at a time with extra payments.
Example 1 — $3,000 at 20% APR, 2% minimum. Initial minimum: $60. Interest in month one: $50. Principal reduction: $10. At this rate, payoff takes approximately 30 years and costs roughly $5,400 in interest—nearly double the original balance. A fixed $100/month instead clears the balance in 38 months with about $780 in interest.
Example 2 — $8,000 at 24% APR, 1% minimum. Initial minimum: $80. Month-one interest: $160. The minimum does not even cover interest—the balance grows. The issuer floors the minimum at $25 once the percentage calculation falls below that threshold, but the balance grows before stabilising. Total cost can exceed $35,000 over 40+ years. Raising the payment to $250/month clears the balance in about 44 months for $2,900 in interest.
Example 3 — $1,500 at 17% APR, 3% minimum. Initial minimum: $45. This is a milder case, but payoff still takes roughly 13 years and costs about $1,100 in interest. A fixed $75/month clears it in 24 months with $300 in interest—saving $800 and 11 years.
Educational tool only — not financial advice. Examples use hypothetical numbers for illustration. Actual results depend on your specific balances, rates, and payment consistency. Consult a qualified financial professional for personalized guidance.