Credit Card Minimum Payment Calculator
A percentage minimum payment shrinks as fast as the balance does, which is why a card can take decades to clear. Work out what yours actually costs, under the formula your own statement uses.
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Why a minimum payment barely works
A minimum payment is designed to keep an account current, not to clear it. On a percentage formula it falls as the balance falls, so the payment shrinks at almost exactly the rate the debt does — and the debt is simultaneously growing at the APR.
The result is an exponential decay so slow it is nearly flat. A $7,400 balance at 24% with a 2% minimum starts at $148 a month against $148 of monthly interest. Almost nothing reaches the principal, and the payoff stretches beyond any horizon worth calculating.
There is no standard formula
Issuers set their own, and the three shapes below cover what US card agreements actually use:
Interest plus a percentage of principal. The month's interest plus 1% of the balance, subject to a floor. This is the most common modern design and it does clear the balance, slowly.
A flat percentage of the balance. Two or three percent, subject to a floor. Slower, because the interest is inside the percentage rather than on top of it.
A fixed amount. Unusual on cards, common on store accounts. It does not shrink, which makes it far better than it sounds.
Your cardholder agreement states which applies. Applying somebody else's formula to your card produces a confident answer to the wrong question.
The floor is what eventually saves you
Most issuers set a minimum payment floor — commonly $25 to $40 — below which the percentage no longer applies. Once the balance falls far enough for the floor to bind, the payment stops shrinking and becomes a fixed amount, and the payoff accelerates sharply.
That transition is the reason a percentage minimum clears at all rather than never. It is also why the last stretch is so much faster than the first.
A fixed extra payment breaks the pattern
The problem with a percentage minimum is that it shrinks. An extra amount does not, so its share of the payment grows every month as the minimum falls away.
The effect is disproportionate. On the $7,400 example, adding $150 a month takes the payoff from decades to roughly three and a half years and removes the great majority of the interest. It is the single most useful thing this calculator has to show.
A worked example
$7,400 at 23.99%, with the minimum set to interest plus 1% of the balance and a $35 floor.
The first month's interest is $147.94. The first minimum is $221.94 — the interest plus $74 of principal. So of a $222 payment, exactly $74 reduces the debt. Left alone, the balance takes about 16 years to clear and costs roughly $7,700 in interest, more than the original balance.
Add $150 a month and it clears in about three years and eight months with around $2,600 of interest. The extra $150 saves more than $5,000 and eliminates twelve years of payments.
The warning on your statement
Card issuers are required to print a minimum payment warning on statements, showing how long the balance takes on minimums alone and the payment that would clear it in three years. It exists because the arithmetic on this page surprised enough people to become a matter of regulation.
Compare that box against what you see here. If the two disagree substantially, the minimum formula entered is probably not the one your card uses.
What this does not model
- Fees. Annual fees, late fees, and over-limit fees are excluded, and all of them add to the balance.
- Penalty APRs. A missed payment can trigger a much higher rate on the whole balance.
- Promotional rates. Balance transfer periods and their expiry are not modelled.
- Multiple balances on one card. Purchases, transfers, and cash advances often carry different rates, with payments above the minimum applied to the highest first.
- The grace period. New charges are treated as accruing interest immediately, which is what happens once a balance is carried.
With more than one card, use the avalanche or snowball calculator to sequence them.
Frequently asked questions
How long does it take to pay off a credit card with minimum payments?
Frequently a decade or more, and on some formulas the balance barely moves at all. It depends on the APR and the minimum formula, which is why both are inputs here rather than assumptions.
Your statement carries a required warning box with the issuer's own figure. It is worth reading.
Why does my minimum payment go down each month?
Because it is calculated as a percentage of the current balance. As the balance falls, so does the payment — which is why progress slows rather than accelerating.
It stops shrinking once the balance is low enough for the dollar floor to bind.
What is the minimum payment on a $5,000 balance?
Under a 2% formula, $100. Under interest plus 1% at a 22% APR, about $141. Under a fixed $35, thirty-five dollars.
Three different answers from three formulas that are all in common use, which is exactly why the calculator asks rather than assuming one.
Does paying the minimum hurt my credit score?
Paying the minimum on time is not itself negative — payment history is what matters most, and a minimum payment is an on-time payment.
What does hurt is the high utilisation that comes with carrying a large balance, which is a significant scoring factor.
Is it better to pay a bit more each month or a lump sum later?
Sooner is better, always. Interest is charged on the balance every month, so a dollar paid today avoids more interest than the same dollar paid in six months.
A fixed monthly extra also compounds in effect: as the minimum shrinks, the extra becomes a larger share of the payment.
Should I close the card once it is paid off?
Not usually. Closing it reduces your available credit, which raises utilisation on your remaining cards, and it can shorten your average account age. Both are scoring factors.
Keeping it open with no balance is generally better, unless an annual fee makes it not worth holding.
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This calculator is provided for general educational and estimation purposes only and is not financial or debt advice. Minimum payment formulas, fees, and promotional rates are set by your card issuer and vary; only your cardholder agreement and statement govern what you actually owe.