What does paying the minimum really cost?

The minimum falls as the balance falls, which is why it takes decades. See the years, the interest, and the fix that costs nothing this month.

Balance on the card

APR

The purchase rate on your statement, not a promotional rate.

How your minimum is worked out

There is no standard formula — it is set by your issuer. Check your cardholder agreement; the defaults here are common, not authoritative.

This month’s interest, plus a slice of the balanceA flat percentage of the balance

Slice of the balance, on top of interest

More options(2)

Minimum payment floor

The smallest the payment can be, whatever the balance. Often 25 to 35.

Anything you pay on top

A fixed extra every month, above the minimum.

$5,000 at 22% APR

19 years 2 months

Paying only the minimum, this card takes 19 years 2 months to clear and costs $8,100 in interest — more than the $5,000 you borrowed, at 1.6× the balance. This month's minimum is $142, and 65% of it does nothing but service interest.

Time to clear: 19 years 2 months
Interest paid: $8,100
This month’s minimum: $142

The fix that costs nothing this month

Freeze the payment at $142

The reason a minimum takes so long is that it falls. Every month the balance drops, the issuer asks for slightly less, and you clear slightly less principal than you did the month before. The debt is chasing an asymptote.

Pay exactly what this month's statement asks — $142 — and simply keep paying that same amount instead of letting it fall, and the card clears in 4 years 10 months rather than 19 years 2 months.

Time saved: 14 years 4 months
Interest saved: $4,978

Costing you nothing extra in month one. The whole saving comes from refusing to let the payment shrink.

The same debt, three ways

What you pay	Clears in	Interest
The minimum, as it fallsStarting at $142, dropping every month	19 years 2 months	$8,100
$142, frozenSame money this month, held level	4 years 10 months	$3,121
$283, frozenDouble the minimum, held level	1 year 10 months	$1,097

Every row assumes you never spend on the card again. A new purchase resets the balance the minimum is calculated from, which is why a card in use can sit at a minimum payment indefinitely without ever appearing to get worse.

The balance, both ways

The shaded gap is the debt you are still carrying only because the payment was allowed to fall.

Minimum, as it falls$142 frozenStill owed because the payment fellHover for any year

Where to go next

Debt payoff — the same card at a fixed payment you choose, rather than the minimum.
Snowball vs avalanche — which card to attack first when you have several.
The fee check — the same compounding arithmetic, running against you in a different place.

Why the minimum takes decades

Most people assume a minimum payment is small but steady — that it chips away at the balance at a constant rate, and the debt clears eventually. It is worse than that, and the reason is structural rather than a matter of the payment merely being low.

The minimum falls as the balance falls. It is recalculated from the balance every month, so the moment you clear a little principal, the issuer asks for slightly less next month. You then clear slightly less principal than before. Repeat that a few hundred times and the debt is chasing an asymptote: always shrinking, never arriving.

This is why a fixed-payment calculator gives the wrong answer here. Feed it an average minimum and it will tell you a comfortable number of years, because it never models the one feature that does the damage. The calculator above recalculates the payment every month, the way your issuer does.

In most cases the only thing that ends the debt at all is the floor — the £25 or $35 below which the minimum cannot drop. Without it, some cards genuinely never clear.

The fix that costs nothing this month

Pay this month's minimum. Then next month, pay that same amount again rather than the smaller sum the statement asks for. Keep it level.

You have not found any extra money — month one is identical — and yet on typical numbers this cuts the term by roughly three quarters and saves more than half the interest. That is the difference between a payment that shrinks and one that does not, and it is the single highest-leverage thing available to someone carrying a card balance.

The formula is your issuer's, not ours

There is no statutory minimum-payment formula. The Consumer Financial Protection Bureau is explicit that the method is set by the card issuer and that you need to read your own cardholder agreement to know yours.

So this site will not tell you what your minimum is. The rule, the percentage and the floor are all inputs, with defaults that are common rather than authoritative — the same treatment the freelance rate calculator gives a tax set-aside. Take the numbers from your statement and the answer will be about your card rather than about an average one.

The two rules behave very differently, which is why you have to pick. A flat percentage of the balance can barely exceed the interest on a high APR, stretching the term to a lifetime. Interest-plus-a-slice always clears real principal, so it is slow rather than hopeless.

Common questions

Where do I find my minimum payment formula?

Your cardholder agreement, usually under a heading like “making payments”. Your statement shows this month's minimum in money, which is enough to check the calculator against — if the figure here matches your statement, the rule and percentage you picked are right. If it does not, adjust the percentage until it does.

Does this assume I stop using the card?

Yes, and that assumption is doing a lot of work. Every figure here describes a balance that is never added to. A single new purchase raises the balance the minimum is calculated from, which is how a card in regular use can sit at a minimum payment for years without ever visibly getting worse — or better.

Why is the interest more than what I borrowed?

Because time, not the rate alone, does most of the work. At a typical card APR the interest charged over nineteen years comfortably exceeds the original balance — the same compounding that makes long-term investing powerful, pointed the other way. It is not a penalty or a trick; it is what a high rate applied for two decades produces.

Is a 0% balance transfer worth it?

Arithmetically a period at 0% is obviously better than the same period at 22%, and you can see the size of the prize by setting the APR here to zero. Whether it works in practice depends on the transfer fee, whether you clear the balance before the promotional rate ends, and whether the new card tempts you into fresh spending — none of which this calculator knows about. It shows you the value of the interest saved; the rest is your judgement.

How is this different from the debt payoff calculator?

That one takes a fixed payment you choose and tells you how long it takes. Use it when you have decided what you can afford. This one models the payment falling month by month, which is what actually happens if you pay whatever the statement asks. They answer different questions and will not agree, because a declining payment and a fixed one are not the same thing.

Not financial advice. Minimum payment formulas are set by your card issuer and vary; the defaults here are common examples rather than sourced figures. Take the rule, percentage and floor from your own cardholder agreement. This tool models one card with no further spending on it.

Not advice. This tool applies arithmetic to assumptions you entered. It does not know your circumstances, your tax position or your goals, and it is not a recommendation to buy, sell or hold anything. Past returns do not predict future ones, and no figure here is a forecast.

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