Credit card payoff calculator
What paying only the minimum really costs, against paying a fixed amount every month until the card is clear.
Interest saved by paying more than the minimum
$12,357
25.3 years on minimums vs 2.3 years
- Minimum only
- 25.3 years
- Fixed payment
- 2.3 years
- First minimum due
- $162.92
| Interest paying minimums | $14,139 |
|---|---|
| Interest paying a fixed amount | $1,781.79 |
| Difference | $12,357 |
On $6,400 at 21.9%, paying $300 a month instead of the 2.5% minimum saves thousands and clears the card years sooner.
Side by side
How this is calculated
Why minimums never end
A minimum of 2.5% of the balance shrinks as the balance does, so each payment covers less principal than the last. Interest is charged first, then the shrinking payment is applied — which is why the tail of a minimum-only payoff runs for decades.
minimum = max(balance × 2.5%, floor)A fixed payment breaks the loop
Holding the payment at its starting level means every month a larger share goes to principal. On a 21.9% card the monthly interest charge on $6,400 is about $117, so anything above that is real progress.
Worked example: $6,400 at 21.9%
| Balance | $6,400 |
|---|---|
| Rate | 21.9% p.a. |
| Minimum | 2.5% or $30 |
| Fixed payment | $300 |
| First minimum due | $160 |
|---|---|
| Paying minimums | decades |
| Paying $300 | about 2 years |
The first minimum is $160 and the first month’s interest is $117 — only $43 of that payment touches the debt.
What this assumes
- No further spending on the card.
- The purchase rate applies to the whole balance.
- Interest is charged monthly on the balance.
- No annual fee or late fees.
Where this commonly goes wrong
- Cash advances carry a higher rate than purchases and usually accrue interest from day one with no grace period.
- Paying anything less than the full statement balance normally forfeits the interest-free period on new purchases too.
- A deferred-interest promotion charges all the interest accrued since day one if any balance remains when it ends.
Questions
How long does it take to pay off a credit card with minimum payments?
On a typical 2.5%-of-balance minimum at around 20%, decades. Because the required payment shrinks with the balance, the last portion of the debt takes far longer than the first, which is why statements are now required to show the minimum-only payoff time.
How much of my payment goes to interest?
Monthly interest is roughly the balance times the annual rate divided by twelve. At $6,400 and 21.9% that is about $117 a month, so a $160 minimum puts only $43 against the debt.
Should I pay off the card or invest?
Clear the card. A 21.9% rate is a return no investment reliably matches, and paying it down carries no risk and no tax. Investing while carrying a card balance is borrowing at 22% to earn maybe 7%.
Will a balance transfer help?
Usually yes, if you clear the balance within the promotional window and stop spending on the old card. Factor the transfer fee — typically 1–3% — and check whether it is true 0% or deferred interest.
Does closing the card help me pay it off?
Closing stops new spending but does not change the balance or the rate, and it can lower your credit score by reducing available limit. Freezing the card usually achieves the same thing without the score impact.
What if I can only afford the minimum?
Pay it every month without fail, then look at a hardship arrangement or a lower-rate consolidation loan. Missing a minimum adds fees and a penalty rate on top of a debt that is already the most expensive money you have.
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Sources
This calculator does arithmetic on the figures you enter. It does not account for tax, fees, or your personal circumstances.
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