The minimum payment trap on credit cards

Credit card issuers set minimum payments low on purpose: you stay current, but most of each payment covers interest while the principal barely moves. Paying only the minimum can stretch payoff across many years and multiply total interest.

How minimums are usually calculated

Many cards use a percentage of the balance (often around 1–2%) plus interest and fees, with a dollar floor (commonly $25–$35). The exact formula is in your card agreement — our calculators model common percentage-plus-floor patterns for planning, not your issuer's live statement.

Why a fixed payment beats drifting minimums

As the balance falls, the minimum falls too, slowing payoff even more. Picking a fixed monthly amount — even $25–$50 above the current minimum — often cuts years off the timeline. Compare minimum-only vs fixed payoff in our minimum payment calculator or credit card payoff calculator; see also methodology for how we model revolving amortization.

Not a substitute for your statement

These are planning estimates. For an exact payoff quote, use your issuer's online payoff calculator or call customer service. For loan payment math with Fed average rate presets, try the auto loan calculator.