Credit card minimum payments are designed to keep you in debt as long as possible. Enter your balance and APR to see exactly how long that takes — and compare it to smarter payment strategies.
We calculate your minimum as 2% of balance or $25, whichever is higher — the standard formula most credit cards use.
The minimum payment on a credit card is the smallest amount you're allowed to pay without triggering a late fee or penalty. For most credit cards, it's calculated as either 2% of your current balance or $25, whichever is higher. Some cards use 1% of balance plus the monthly interest charge. Either way, the result is a payment that — by design — extends your debt as long as economically possible.
The mechanics are quietly devastating. On a $5,000 balance at 22% APR, your first minimum payment is about $100. Of that, roughly $92 goes to interest and only $8 reduces your actual balance. You've paid $100 and your debt is now $4,992. Next month, your minimum payment drops slightly because your balance is slightly lower — maybe $99.80 now. This shrinking payment is the trap's key mechanism. As you dutifully pay, the required minimum falls, which means you're constantly paying a little less, extending your timeline indefinitely.
A $5,000 balance at 22% APR paying only the minimum: approximately 13–15 years to pay off and over $4,000 in interest — nearly as much as the original debt. The card issuer earns $4,000 in profit from your $5,000 debt.
Most credit cards use one of two formulas. The percentage method: 2% of your current statement balance, or $25, whichever is greater. The interest-plus method: 1% of your balance plus that month's interest charge, or $25, whichever is greater. Our calculator uses the 2% method, which is the most common. Your actual minimum may differ slightly — always check your card's terms.
The power of paying above the minimum is extraordinary, and this calculator makes it visible. Adding $50 to your monthly payment doesn't just pay off $50 more of debt this month — it eliminates $50 of balance that would have generated interest every single month going forward. The compounding effect of consistent overpayment is the exact mirror image of the compounding effect that makes minimum payments so expensive.
Use our full debt payoff calculator to model exactly what paying a specific fixed amount each month does to your payoff timeline, or our multi-debt planner if you have several cards to tackle simultaneously.