Why minimum payments keep you in debt
Credit-card minimums are deliberately small — typically about 2% of the balance, with a dollar floor of around $25. Because the required payment is tied to the balance, it shrinks every month as the balance falls. The result is a long, slow grind where most of each early payment is pure interest. On a high-APR balance, paying only the minimum can take well over a decade and cost more in interest than you originally borrowed.
How the balance changes
balancenext = balance + balance · r − payment
where r = monthly rate (APR ÷ 12). When your payment is larger than the monthly interest (balance · r), the balance falls. When it isn’t, the balance never clears.
What makes this calculator different
- The minimum-payment comparison. We simulate the real declining minimum side by side with your fixed payment, so you can see the years and dollars a steady payment saves.
- The never-payoff warning. If your payment barely covers interest, we tell you plainly that the balance will never clear.
- Month-by-month accuracy. Interest is applied on the actual remaining balance each month, not an approximation.
- Full payoff schedule. See the balance burn down year by year, with an exportable schedule.
Frequently asked questions
Why does paying only the minimum cost so much?+
Your card’s minimum payment is usually a small percentage of the current balance (often around 2%) with a low dollar floor. As the balance falls, the required minimum falls with it — so each payment chips away less and less, and a larger share goes to interest. That “declining minimum” keeps you in debt for years, sometimes decades, and the total interest can rival or exceed the original balance. Committing to a fixed monthly payment instead is what actually clears the debt.
How is my payoff time calculated?+
Each month we add interest at your monthly rate (APR ÷ 12) to the balance, subtract your fixed payment, and repeat until the balance reaches zero. The interest portion is largest at the start, when the balance is highest, and shrinks as you pay down principal. The calculator counts the months until the balance clears and totals the interest you paid along the way.
What happens if my payment barely covers the interest?+
If your monthly payment is less than or equal to the first month’s interest charge, none of it reduces the principal — the balance stays flat or grows, and the card is never paid off. The calculator flags this case. The fix is to pay more than the monthly interest: even a little above that line starts reducing the balance, and the more you add, the faster it falls.
How much faster will a higher payment clear my balance?+
Because interest compounds on the remaining balance, every extra dollar you pay removes future interest as well as principal. Raising a fixed payment even modestly can cut the payoff time dramatically and save a large share of the total interest. Try a few payment amounts in the calculator to see your specific numbers.
Does this account for new purchases on the card?+
No — it models paying down a fixed starting balance with no new charges added. To get out of debt on schedule, stop adding to the balance while you pay it off; new purchases reset the math and extend your payoff time.
Disclaimer: This calculator is for educational purposes only. Real card terms — minimum-payment formulas, how interest is compounded, fees, and promotional rates — vary by issuer. It assumes a fixed balance with no new purchases and is not financial advice.