Why does paying only the minimum take decades?

Most US issuers compute the minimum as the greater of $25 or 1–3% of the balance plus interest. As the balance shrinks, so does the minimum — a declining payment against compounding interest stretches payoff to 15+ years and can more than double the total paid.

What APR should I enter?

Your card's purchase APR (not the promotional 0% rate, unless that's still active). Check your most recent statement. Variable APRs change with the prime rate, so treat the calculation as a snapshot.

How is interest calculated?

Daily: balance × (APR / 365), summed over the billing cycle. This tool uses a monthly-compounding simplification (APR / 12) which is within ~0.1% of the true daily calculation for typical balances.

Should I pay minimums or fix a payment?

Always try to pay more than the minimum. A fixed payment of even $50 above the minimum typically cuts payoff time in half and saves thousands in interest. Compare the three strategies in the calculator.

Credit Card Payoff Calculator

Finance· 18 tools

Free credit card payoff calculator. Enter your balance, APR, and payment strategy (minimum payment, fixed amount, or target payoff date) to see the payoff timeline, total interest paid, and the penalty of paying only the minimum. Based on standard daily-periodic-rate amortization used by US issuers.

Balance (USD)

APR (%)

Payment strategy

Monthly payment (USD)

Min payment typically = interest + 1% of balance, with a $25 floor. Uses monthly compounding.

Time to payoff

2 yr 11 mo

Total interest

$1,871.08

Total paid

$6,871.08

vs. minimum payment

Min-only payoff19 yr 1 mo

Min-only interest$8,339.53

Interest saved$6,468.46

Time saved16 yr 2 mo

Frequently Asked Questions

References

Credit Card Interest Rate — Federal Reserve G.19 — Federal Reserve
Credit card minimum payments — CFPB — Consumer Financial Protection Bureau

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Frequently Asked Questions

References and sources

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