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A credit card minimum payment calculator shows how your issuer computes the minimum due and what happens when you pay only that amount each month. Most issuers set the minimum as a percentage of your balance (typically 1% to 3%) or a small percentage plus monthly interest, with a dollar floor around $25. Because the minimum declines as your balance drops, paying only the minimum stretches repayment to years or decades and causes total interest to rival or exceed the original charges. This calculator lets you pick your issuer's formula, see the exact declining minimum schedule, and compare it against a fixed monthly payment.
See how your minimum payment is calculated and how long it takes to pay off your balance when you pay only the declining minimum each month.
Balance: $5,000.00
APR: 22.00%
Formula: Minimum = max($25.00, 2% of balance)
Minimum = max($25.00, 2% of balance)
Floor: $25.00
Fixed payment for comparison: $200.00/mo
Debt-Free Date (Minimum Only)
968 months from now
Months at Minimum Payment
968
≈ 80.7 years
Minimum Only vs. Fixed $200.00/mo
You save 934 months and $41,669.61 in interest
First Minimum
$100.00
Declines each month
Total Interest (Min)
$43,419.49
89.67% of total paid
Total Paid (Min)
$48,419.49
Principal $5,000.00 + interest
Monthly Payment (Fixed)
$200.00
Same amount each month
This calculator provides estimates for informational purposes only. Actual minimum payment calculations vary by issuer and may include fees. Always check your statement for your exact minimum payment and terms.
| Metric | Minimum Only | Fixed $200.00/mo |
|---|---|---|
| Months | 968 | 34 |
| Total Interest | $43,419.49 | $1,749.88 |
| Total Paid | $48,419.49 | $6,749.88 |
| Payoff Date |
Paying a fixed $200.00/mo saves you $41,669.61 in interest
and 934 months faster than paying only the declining minimum.
Because the minimum payment shrinks as your balance drops, you pay mostly interest in early months. A fixed payment keeps your principal reduction consistent.
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Credit card issuers use one of three common formulas to determine your monthly minimum. Understanding which formula applies to your card matters because it directly affects how quickly the balance declines and how much total interest you pay over time.
The Three Common Minimum Payment Formulas
Formula 1: Flat percentage of balance. The simplest approach. Your minimum is a fixed percentage of your statement balance, usually 2%. Example: 2% of $5,000 = $100 minimum. Formula 2: Percentage plus monthly interest. Your minimum equals a smaller percentage of the balance (often 1%) plus that month's interest charge. Example: 1% of $5,000 ($50) plus $91.67 in interest = $141.67 minimum. Formula 3: 1% plus interest plus fees. The newest CFPB-influenced formula. Your minimum is 1% of the balance, plus monthly interest, plus any late fees or annual fees. This ensures at least a small portion always goes toward principal. All three formulas include a dollar floor, typically $25 to $35, which prevents the minimum from dropping below that threshold even as the balance shrinks.
The specific formula your issuer uses is stated in your card agreement under the section titled "minimum payment disclosure" or similar wording. Check your most recent statement or the issuer's website to confirm which applies. The calculator above lets you select the formula that matches your card so the results reflect your actual situation.
The declining minimum creates a trap that is easy to underestimate. Because the minimum drops each month as the balance decreases, your payment shrinks right along with it. The result is that nearly all of each payment goes toward interest, and the principal barely moves. This dynamic means the timeline stretches far beyond what most people expect.
Worked Example: $5,000 at 22% APR, 2% Minimum, $25 Floor
Month 1: Balance $5,000. Minimum = 2% of $5,000 = $100.00. Interest = $5,000 x (22% / 12) = $91.67. Principal = $100.00 - $91.67 = $8.33. New balance: $4,991.67. Month 12: Balance is approximately $4,901. Minimum = 2% of $4,901 = about $98. Interest = $4,901 x (22% / 12) = about $90. Principal = about $8. After 5 years (60 months), the balance is still roughly $4,524. That means in five full years of making every payment on time, you have retired only about $476 of the original $5,000 balance. Total payoff: approximately 968 months (over 80 years) and total interest of roughly $43,400. You would end up paying over $48,000 for a $5,000 charge.
The reason the payoff takes so long is that the minimum payment declines in lockstep with the balance. As the balance gets smaller, so does the payment, and the ratio of interest to principal in each payment stays roughly the same. The balance never reaches zero on its own until the dollar floor kicks in at the very end. Use the calculator above to see the exact month-by-month breakdown for your own balance and rate.
A 2% minimum is the most widely used formula among major credit card issuers. At this rate, the monthly periodic interest on a 22% APR card is 22% / 12 = 1.833%. Because the 1.833% interest charge is very close to the 2% minimum, only about 0.167% of the balance actually gets reduced each month. In practical terms, roughly 92% of your first payment goes to interest and only 8% to principal.
2% Minimum Comparison at 22% APR
$5,000 balance: Payoff takes approximately 968 months (over 80 years). Total interest paid is roughly $43,400, for a total cost of about $48,400. $10,000 balance: At the same 2% minimum and 22% APR, the balance never drops far enough to reach the $25 floor within 100 years. In practical terms, making only the 2% minimum on a $10,000 balance at this rate means the debt is never repaid within a normal lifetime. The larger balance is dramatically worse, not merely twice as bad. The reason is that at a 2% minimum, the ratio of interest to principal stays high throughout the schedule, and a larger starting balance means the balance decays from a higher point and may never reach the $25 floor that would otherwise begin to accelerate payoff.
The pattern is clear: the larger the balance, the worse the interest to principal ratio becomes over the life of the repayment. A 2% minimum on a high-APR card is essentially an interest-only payment plan with a tiny principal reduction attached. If your card uses the 2% formula, even a modest increase to a fixed payment of $150 or $200 per month can eliminate decades of payments and tens of thousands of dollars in interest.
When you pay only the minimum, the split between interest and principal in each payment is heavily skewed toward interest for a very long time. The exact split depends on your APR and minimum formula, but the pattern is consistent across all scenarios.
Interest vs Principal Split Over Time ($5,000 at 22% APR, 2% Minimum)
Month 1: 92% interest ($91.67), 8% principal ($8.33). Year 1 (average): Approximately 92% interest, 8% principal. The balance has barely moved. Year 5: Still approximately 92% interest, 8% principal, and the balance remains over 90% of the original amount. Year 15: The split is still approximately 92% interest, 8% principal. Because both the minimum and the interest charge scale with the balance, the ratio stays essentially fixed for as long as the percentage formula applies. It only begins to shift once the balance drops far enough for the $25 floor to take over, which at 22% APR does not happen until around year 69. The compounding effect is what makes this so expensive. Each month, you pay interest on the previous month's interest. Because the principal declines so slowly, the interest base remains large for a very long time, and the compounding cycle repeats month after month for decades.
This is the core reason why paying only the minimum is so costly. The interest portion of each payment compounds on itself, and the declining minimum means you never apply enough to break the cycle until many years have passed. The calculator above displays the exact interest and principal amounts for every month so you can see precisely where your money goes.
A $5,000 balance is one of the most common scenarios people search for. Here is a complete breakdown at 22% APR with a 2% minimum and $25 floor, followed by a direct comparison against a fixed $200 per month payment plan.
$5,000 at 22% APR: Minimum vs Fixed $200/Month
Minimum payment schedule: Month 1: $100.00 minimum. Month 50: minimum is still about $92 (balance approximately $4,600). Month 100: minimum is still about $85 (balance approximately $4,232). The minimum stays well above the $25 floor for decades. The floor only takes over around month 833 (year 69), when the balance finally drops below $1,250. Total: approximately 968 months (over 80 years), roughly $43,400 in interest. Fixed $200/month: Payoff in approximately 34 months (under 3 years). Total interest: roughly $1,750. Savings: about 934 fewer months (over 78 years) and roughly $41,700 less in interest. The fixed payment eliminates the balance nearly 28 times faster and costs less than 5% of the total interest.
The contrast is stark. A fixed $200 per month, which is only double the initial minimum, turns an 80-year ordeal into a sub-3-year plan and saves over $41,000. The reason is straightforward: a fixed payment keeps a consistent and meaningful amount attacking the principal each month, so the interest base shrinks rapidly instead of barely moving. Use the calculator above to model your own $5,000 scenario and experiment with different fixed payment amounts to find the right balance between monthly cost and total savings.
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