The Finance AlgorithmTFA

Minimum Payment Calculator

Calculator

See how long it takes to pay off debt with minimum payments only

Free to useNo data storedAI insightsUpdated: February 2026

The minimum payment trap is real. Banks design minimums to maximize their interest income. This calculator shows you the shocking truth about paying only the minimum.

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Additional amount above minimum

Real-World Examples

Minimum Payment Trap

$5,000 balance at 20% APR, paying 2% minimum (starts at $100, decreases over time).

Inputs:

balance:5,000rate:20min:2%
Time to payoff: 27 years! Total interest: $8,396. You'd pay $13,396 for a $5,000 balance. With fixed $200/month: 2.5 years, $1,364 interest.

Frequently Asked Questions

Glossary

Minimum Payment
The smallest amount you must pay monthly to avoid late fees, usually 2-3% of balance or $25.
Principal
The original amount borrowed, excluding interest. Minimum payments barely touch this.
Amortization
How payments are split between interest and principal over time.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026

How to Use
  1. Enter your current credit card balance
  2. Add your card's interest rate
  3. Select how your minimum is calculated
  4. Optionally add extra monthly payment
  5. Compare payoff time and interest
Key Information
  • Minimum payments are designed to keep you in debt longer
  • A $5,000 balance can take 20+ years with minimums only
  • Most of your minimum goes to interest, not principal
  • Even small extra payments dramatically reduce time
Pro Tips
  • Always pay more than the minimum - any amount helps
  • Round up minimums to the nearest $50 or $100
  • Set a fixed payment amount instead of the minimum
  • Consider a balance transfer to accelerate payoff
Avoid These Mistakes
  • Thinking minimum payments are 'enough'
  • Not realizing how much goes to interest
  • Assuming the balance will shrink quickly
  • Not setting up extra automatic payments
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