Credit card payoff calculator
A minimum payment is a percentage of the balance, so it shrinks as the balance shrinks. That is what turns a few thousand dollars into a twenty-year problem.
Credit card payoff calculator
Payment schedule
Why the minimum payment is a trap
A credit card minimum is typically 1–3% of the outstanding balance, subject to a floor of $25 or so. That percentage is the whole problem: as the balance falls, the payment falls with it. You are always paying the same small fraction of a shrinking number, which is the arithmetic definition of never getting there.
On $5,000 at 24% with a 2% minimum, the first payment is $100. Two years later the balance is still over $4,000 and the payment has drifted down to $82. Total time to clear: over twenty years, with more than $10,000 of interest.
What fixing the payment does
Pay a flat $150 a month on the same card and it clears in roughly 47 months with about $2,000 of interest. The monthly outlay starts only $50 higher than the minimum, and the outcome is a different financial life.
Nothing clever happened. You simply stopped letting the payment shrink, so every dollar of progress compounded instead of being handed back.
Where the payment goes first
By law in the US, anything above the minimum must be applied to the highest-APR balance on the card. Below the minimum, the issuer chooses — and chooses the lowest rate. That is why paying only the minimum on a card carrying both a purchase balance and a cash advance is particularly expensive.
Before you optimise the payment
A 0% balance transfer with a 3% fee costs 3% for twelve to twenty-one months rather than 24% a year. On $5,000 that is $150 against roughly $1,200 of interest over the same period. It only works if the card you cleared stays at zero; otherwise you have doubled the debt rather than moved it.
Clearing a 24% card is a guaranteed 24% return. Nothing available to a retail investor competes with that on a risk-adjusted basis.
Guides that explain this
Written with the same engine, so every figure agrees with the calculator.
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Questions people actually ask
How long does it take to pay off a credit card with minimum payments?
On $5,000 at 24% APR with a 2% minimum, over twenty years and more than $10,000 in interest. The minimum is a percentage of the balance, so it shrinks as the balance shrinks.
How much faster is a fixed payment?
Dramatically. The same $5,000 at 24% cleared with a flat $150 a month takes about 47 months and roughly $2,000 of interest — around $8,000 less than minimum payments, for about $50 a month more at the start.
Is a balance transfer worth the fee?
Usually. A 3% fee on $5,000 is $150, against roughly $1,200 of interest over a year at 24%. It only works if you stop using the cleared card.
How are credit card payments applied?
In the US, anything above the minimum must go to the highest-APR balance. The minimum itself is applied at the issuer's discretion, which generally means the lowest rate first.