How to calculate the cost of minimum credit card payments
Minimum payments are designed to keep you in debt: they are a small percentage of the balance, so as the balance falls the payment falls too and the end date stretches out for decades.
The rule
Each month: interest = balance × monthly rate; payment = max(percentage of balance, floor); balance = balance + interest − payment
Do it automatically — Credit card minimum-payment costStep by step
- 1Take your current balance and the card's APR.
- 2Convert the APR to a monthly rate.
- 3Apply the minimum payment rule your issuer uses — usually a percentage with a small cash floor.
- 4Iterate month by month until the balance hits zero, and total the interest paid along the way.
What trips people up
- • Paying a fixed amount instead of the shrinking minimum can cut years off the payoff.
- • New spending on the card resets the maths entirely.
Common questions
How long do minimums take?
On a typical card balance and APR it can run past 20 years and cost more in interest than the original debt.
Does paying the minimum hurt my credit?
Not directly, but the resulting high utilisation does.
Skip the maths
See how long a card balance takes to clear at the minimum payment and what it costs.
Open the cost of paying the minimum tool