The Minimum Payment Trap, in Numbers
A $5,000 balance at 22.9% APR with a typical minimum payment (interest + 2% of balance, $25 floor) takes decades to clear and costs more in interest than most people ever borrow on the card. Minimum payments are engineered to keep you paying: they shrink as your balance shrinks, so every statement looks affordable while the payoff horizon barely moves.
Switch the strategy above to Minimum Only and watch the payoff time panel — then switch to Fixed Payment. Holding a payment constant instead of letting it shrink with the balance is the single biggest lever on this page.
The second lever is size: on most balances, going from $150 to $250 a month doesn't cut payoff time by a third — it cuts it by well over half, because the extra dollars go entirely to principal.
Why APR Compounds So Brutally
Credit card interest compounds daily on most US cards, and the APR you see is already the annualized cost. At 22.9% APR, a $5,000 balance accrues roughly $95 in interest in the first month alone — before you swipe the card again. If your payment is $100, almost nothing reaches the principal.
That's the line this calculator draws for you: any payment at or below the monthly interest charge mathematically never pays off the card. The tool will tell you plainly when that's your situation, and what the minimum viable payment is.
Avalanche vs. Snowball: Which Order to Pay Cards
With multiple cards, two ordering strategies dominate the advice space:
- Avalanche: pay minimums on everything, throw all extra money at the highest APR card. Mathematically optimal — always saves the most interest.
- Snowball: pay minimums on everything, throw all extra money at the smallest balance card. Costs somewhat more interest, but closing accounts early builds momentum — and behavioral research consistently shows people who use it are more likely to finish.
The right answer is whichever you'll actually stick with. A useful hybrid: snowball any tiny balances under a few hundred dollars for quick wins, then switch to avalanche for everything else. Run each card through this calculator to see its individual timeline first.
Common Questions
How is the minimum payment calculated?
This calculator models the most common issuer formula: the greater of a flat floor (typically $25–$41) or a percentage of the balance plus the month's interest — defaults are $25 and 2%, and both are editable. Real formulas vary by issuer and some use percent-of-balance only; check your card's terms. The minimum settings only affect the comparison column, not your chosen strategy.
Why does paying only the minimum take so long?
Because the minimum shrinks as your balance shrinks, most of each payment keeps going to interest and the principal barely moves. On a $5,000 balance at 22.9% APR, minimum-only payments can stretch well beyond 20 years and cost more in interest than the original purchases. The comparison panels on this page show the exact timeline and interest for your numbers.
Does this calculator assume I stop using the card?
Yes. The simulation holds the balance frozen — no new purchases, fees, or balance transfers. New spending extends the timeline one-for-one; if you keep charging $300/month while paying $350, the real payoff is dramatically longer than shown. Payoff plans and ongoing spending don't mix.
Related Calculators
- Loan Calculator — Fixed installment loans with amortization schedule
- Car Payment Calculator — Auto loan payment and total cost
- Compound Interest Calculator — See compounding work for you instead of against you