Paying only the minimum on a credit card feels manageable month to month, but it is one of the most expensive habits in personal finance. This calculator reveals the true cost — how many years it takes and how much interest you pay — when you make only the minimum payment, so you can see why paying more is worth it.
How minimum payments are set
Issuers typically set the minimum at 1–3% of your balance or a small fixed amount like $25, whichever is greater. Some also add the month's interest and any fees. Because the minimum shrinks as your balance falls, the payment gets smaller over time — which is exactly what stretches the payoff out for so long.
Why minimum-only is a trap
When the minimum is a small percentage of the balance, most of it goes to interest and only a sliver touches the principal. That is why a modest balance can take decades to clear and cost more in interest than the original purchases — the payment barely stays ahead of the interest being added.
A worked example
A $5,000 balance at 20% APR with a 2% minimum payment can take over 30 years to pay off and cost more than $6,000 in interest — more than the balance itself. Paying a fixed $200 a month instead clears it in about 2.5 years with roughly $1,300 in interest.
Escaping the minimum-payment cycle
- Pay a fixed dollar amount rather than the shrinking minimum, so progress accelerates over time.
- Even doubling the minimum can cut years and thousands of dollars off the total.
- Consider a balance transfer to pause interest and let your payments hit principal.
- Never miss a minimum — late payments trigger fees and can raise your rate through a penalty APR.