Credit Card Minimum Payment Calculator
The minimum payment is the smallest amount you can pay and stay current — which is also, by design, the most expensive way to clear your card. See how your issuer calculates the minimum, what years of minimums actually costs, and how the math flips with a few extra dollars a month.
What if you paid more each month?
Adding even a small fixed amount on top of the minimum collapses the payoff timeline.
Paying $200.00/month instead of just the minimum saves you 47 years, 1 mo and $43,269.30 in interest.
How credit card minimum payments are calculated
US issuers use one of two minimum-payment formulas, plus a hard dollar floor and any add-ons for past-due or over-limit amounts. Both formulas are spelled out in the cardholder agreement under minimum payment due or how we calculate the amount you owe.
- Percent of balance, or a floor — whichever is greater.The older standard. Most commonly 1–3% of the statement balance, with a hard floor around $25. If 2% of your $5,000 balance is $100, that's your minimum; if 2% of a $400 balance is only $8, the $25 floor takes over.
- One percent of principal plus this month's interest, with the same floor.Chase, Citi, and Discover have moved to this version on most cards. It looks friendlier (the principal slice is only 1%, not 2%) but it's structurally similar: by guaranteeing the full interest charge gets paid, it makes sure the balance never actually grows — but it also barely shrinks.
On top of whichever formula applies, the issuer adds past-due amounts, over-limit fees, late fees, and returned-payment fees. So in any month where you missed a payment or tripped a fee, the minimum can jump well above the formula amount — and a portion of your next payment goes to clearing those fees before any principal gets touched at all.
If your APR and your minimum-payment formula are both known, how credit card interest works walks through the daily-periodic-rate side of the math; this page focuses on the payment side. The calculator above models both minimum-payment formulas — switch between them with the rule selector to see how they compare on the same balance.
Why minimum payments cost so much
Credit card minimums look small for a reason. Both common US formulas are engineered to be just barely above the interest accruing each month. They keep you current, but they barely touch the principal.
Consider a $5,000 balance at a 23% APR with the 2%-or-$25 rule. Your first minimum is $100. That same balance accrues about $96 in interest in its first month, so only $4 of that $100 actually pays down the debt. Next month the balance is $4,996 — and your minimum drops, too, because it's a percentage of the now-slightly-smaller balance. You're running on a treadmill that the issuer controls the speed of.
The result, played out over years: that $5,000 balance takes roughly 30 years to clear at minimums and costs around $13,000 in total interest. The bank earns more than 2.5× the original balance for the use of the money. Doubling the minimum — paying $200 a month instead of $100 — clears the same debt in under 3 years and cuts the interest cost by 80% or more.
The lesson isn't that minimums are evil; they exist so people going through a hard month can stay current without defaulting. The trap is treating them as the plan. Any fixed amount above the minimum — even $25 or $50 a month — moves you from the issuer's schedule to your own.
Payoff time: minimum vs. minimum + a fixed extra
The same $5,000 balance at 23% APR, under the 2%-or-$25 rule, with different amounts added on top of the calculated minimum each month:
| Extra per month | Time to clear | Total interest |
|---|---|---|
| $0 (minimum only) | ~30 years | ~$13,000 |
| +$25 | ~7 years | ~$3,200 |
| +$50 | ~4 years | ~$1,900 |
| +$100 (doubling) | ~2.5 years | ~$1,100 |
The first $25 of extra payment is doing almost all of the work. It cuts the payoff from three decades to seven years and saves about $9,800 in interest — and it does that because every dollar of extra payment goes 100% to principal, where it cancels every future interest charge that dollar would have accrued. Once you cross the threshold of paying meaningfully more than the interest, the loan starts behaving like a regular amortizing debt instead of a perpetual one. See paying extra on principal for the underlying math.
Worked example: $6,000 at 22% APR
Suppose you carry a $6,000 balance at 22% APR on a card that uses the 2%-or-$25 minimum rule. Here's month one, step by step:
- Monthly periodic rate: 22% ÷ 12 ≈ 1.833% per month
- Interest charge for the month: $6,000 × 1.833% = $110
- Formula minimum: 2% × $6,000 = $120 (above the $25 floor, so $120 wins)
- Principal reduction this month: $120 − $110 = $10
- New balance: $5,990
Ten dollars of a $120 payment is actual debt reduction — 8% of what you sent in. The other 92% rents the borrowed money for another 30 days. Next month the formula calculates 2% of the new $5,990 balance, the minimum drops to $119.80, and the same 92% of it goes back out as interest. The pattern continues until the balance is low enough that the $25 floor kicks in, and even then the floor is mostly paying interest until very near the end.
If you instead committed to a fixed $150/month — only $30 more than the starting minimum — the same $6,000 balance clears in about 5 years for roughly $3,000 in interest, versus more than two decades and $9,000+ at minimums. The leverage of the extra $30 is enormous because it all lands on principal instead of being eaten by the interest charge.
To turn that fixed-payment idea into a payoff date for your own balance, use the credit card payoff calculator. If you have more than one card, the debt snowball calculator shows the payoff order and total interest across the whole portfolio.
Frequently asked questions
How is the credit card minimum payment calculated?
Most US issuers use one of two formulas. The older "percent-or-floor" rule charges a flat percentage of the statement balance (typically 1–3%) or a hard-coded dollar floor (commonly $25), whichever is greater. The newer "percent-plus-interest" rule — used by Chase, Citi, and Discover on many cards — charges 1% of the principal balance plus the full month's interest charge, with the same $25 floor. Any past-due amounts, over-limit amounts, and late or returned-payment fees are added on top of whatever the formula produces. The exact rule for your card is printed in your cardholder agreement under "minimum payment due" or "how we calculate the amount you owe."
Why do credit card minimum payments cost so much?
Because the minimum-payment formulas are calibrated to be barely above the monthly interest charge. On a $5,000 balance at 23% APR, the monthly interest is about $96. A 2% minimum is $100 — so only $4 of that first payment actually reduces the principal. The balance barely moves, the interest keeps compounding, and the payoff stretches across decades. The longer the payoff, the more times you pay interest on the same dollar of borrowed money. That's why a $5,000 balance at minimums can take 25–30 years and cost 2–3× the original balance in interest alone.
Why is the minimum payment called a trap?
Because the formula is designed to be barely above your monthly interest charge. Two percent of a $5,000 balance is $100, but that same balance accrues around $96 in interest each month at a 23% APR — so only about $4 of your first payment goes to actual principal. The balance shrinks at a glacial rate, and you end up paying for the same borrowed dollar dozens of times over.
Which minimum-payment rule does my card actually use?
It's printed in your cardholder agreement under "minimum payment" or "how we calculate the amount you owe." Most US issuers use one of two formulas: a flat percent of the statement balance (often 1–3%) with a $25 floor, or the newer "1% of balance plus this month's interest" formula that Chase, Citi, and Discover have moved toward. The calculator above models both.
Will paying the minimum hurt my credit score?
Paying the minimum on time keeps your account in good standing — so it won't hurt your payment history, which is the biggest factor in your score. But because the balance barely moves, your credit utilization stays high, which does drag your score down. Paying more than the minimum is the fastest way to bring both your interest costs and your utilization down at once.
Why does the math hit a 50-year cap sometimes?
The "1% of balance + interest" rule is geometric: each month you pay roughly 1% of the balance plus the interest, so the balance decays at about 99% per month. That converges toward zero but never quite gets there mathematically — only the $25 floor eventually finishes the job. With a very small starting balance or a very low floor, the simulation can hit our 50-year cap before the balance is fully retired. When that happens, we show you what 50 years of minimums would cost and warn that the trap is even worse than the headline number.
Is even $20 or $50 more per month really worth it?
Yes — disproportionately so. Every extra dollar you pay goes 100% to principal, which means less balance accruing 20%+ interest next month, and the savings compound every cycle. The comparison row above defaults to doubling the minimum, but try $20 or $50 and you'll typically see years cut off the timeline and hundreds to thousands saved in interest.
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Estimates are educational only. They assume a fixed APR with monthly compounding, an end-of-month payment, and that the listed minimum-payment formula stays constant for the full payoff period. Real issuer rules can vary by account standing and may change over time.