Minimum Payment Calculator
Estimate a credit card's minimum monthly payment using the larger of a percent-of-balance floor or "interest plus 1% of principal" — the two common issuer formulas. Useful for predicting card payments and understanding why minimum-only payments take so long to clear a balance.
Last updated: May 2026
Compare with similar
About this calculator
US credit-card minimum payments are set by the card issuer and vary, but most follow one of two formulas: either a fixed percentage of the outstanding balance (commonly 1–3%), or the accrued interest for the month plus a small principal component (often 1% of the principal). This calculator takes the larger of the two: max(balance × paymentPercentage/100, balance × APR/100/12 + balance × 0.01). The first term is the percent-of-balance floor; the second term is the interest-plus-1%-of-principal alternative. Most issuers also impose a hard floor (commonly $25 or $35) regardless of balance — this calculator does not enforce that. Variables: balance is the current statement balance; APR is the card's annual percentage rate (the rate quoted by the issuer, not the daily periodic rate); paymentPercentage is the percent-of-balance figure (default ~2%, set by the issuer). Edge cases: a balance of $0 produces a $0 minimum (no payment due if no debt); very low APR or paymentPercentage can produce a tiny payment that is less than the issuer's floor (real cards would just charge the floor). The famous "minimum-only payment trap" arises because minimum payments are designed to barely exceed the interest plus a token principal reduction — paying only the minimum on a $5,000 balance at 22% APR takes about 20–30 years to clear and costs more in interest than the original balance. CARD Act 2009 requires issuers to disclose how long minimum-only payment would take, and the result is sobering: the disclosure on most statements shows 20+ year payoffs and 2–4× total interest. The takeaway: minimum payment is a floor, not a target; aim to pay the full statement balance or at minimum 2–3× the minimum.
How to use
Example 1 — Standard card balance. You have a $5,000 credit-card balance at 22% APR with a 2% minimum-payment percentage. Enter Balance = 5000, APR = 22, Payment Percentage = 2. Percent floor: 5000 × 0.02 = $100. Interest + 1%: 5000 × 0.22/12 + 5000 × 0.01 = 91.67 + 50 = $141.67. Calculator returns the max: ≈ $141.67. ✓ If you pay only this minimum each month, it would take roughly 25–30 years to pay off (interest keeps growing the balance back); total interest could exceed the original $5,000. Example 2 — Smaller balance, lower rate. You have $1,200 at 14% APR with 2% minimum. Enter 1200, 14, 2. Percent floor: 1200 × 0.02 = $24. Interest + 1%: 1200 × 0.14/12 + 1200 × 0.01 = 14 + 12 = $26. Max = $26. ✓ But many issuers have a $25 hard floor, so the actual minimum charged would be $26 (just over the floor). At minimum-only, this debt would still take roughly 5–6 years to pay off and accrue substantial interest — even modest balances at modest rates demand aggressive payments to clear in reasonable time.
Frequently asked questions
How are credit-card minimum payments actually calculated?
Each issuer sets its own formula, but the two dominant approaches are: (1) flat percent of balance — commonly 1%, 2%, or 3% (so on a $3,000 balance, minimum = $30, $60, or $90 respectively). (2) Interest plus principal floor — most commonly the accrued interest for the period plus 1% of the principal balance, with a hard minimum like $25 or $35. Some issuers blend the two: take the larger of "percent of balance" and "interest + 1%". Federal regulation (CARD Act 2009) requires that minimum payments cover at least some principal reduction, ruling out interest-only minimums. Always check your cardmember agreement for the exact formula; the disclosure must appear on every monthly statement under the "minimum payment warning" section, including how long minimum-only payment will take to clear the balance.
Why does paying only the minimum take so long?
Because minimum payments are designed to be just slightly more than the monthly interest charge, leaving only a sliver of principal reduction each month. As the balance shrinks, the percentage-based minimum also shrinks, slowing payoff further. A concrete example: $5,000 at 22% APR with 2% minimum payment. Month 1 payment ≈ $100 (2% of $5,000); interest charge ≈ $92; principal reduction ≈ $8. Next month's balance is $4,992; payment falls to ~$99.84, and so on. Total time to clear: about 20–30 years. Total interest paid: typically 2–4× the original principal. This is exactly why credit-card debt is so expensive and so persistent — the system is designed to keep balances revolving. The CARD Act requires issuers to show a "if you pay only the minimum, you'll pay X dollars over Y years" disclosure on every statement; check yours.
What is the smarter alternative to minimum payments?
Pay the full statement balance every month. This avoids any interest charge entirely (the grace period covers new charges until the next due date) and keeps your credit utilisation low. If you can't pay in full, pay as much above the minimum as you can — even $50 extra per month on a $5,000 balance dramatically shortens payoff time. Concrete: minimum-only on $5,000 at 22% takes ~30 years; paying $250/month clears it in about 2 years; $500/month in about 1 year. The interest savings between minimum-only and aggressive payoff can easily exceed the original principal. Other tools: 0% balance-transfer cards (transfer the balance, pay it off during the 12–18 month no-interest window, accept the 3% transfer fee as the cost), debt consolidation loans (lower fixed rate), and negotiating a hardship rate with your issuer if you're truly stuck.
What are the most common mistakes people make with credit-card minimums?
The first is treating the minimum as a "target" rather than a floor; minimum payments are the absolute lowest you can pay without penalty, not a recommended amount. The second is ignoring the issuer's floor (typically $25–$35); on small balances the percentage formula produces a tiny number, but the actual charge defaults to the floor. The third is paying only the minimum because the statement makes it seem "manageable" — the long-run cost is staggering. The fourth is not realising that new purchases lose grace-period protection once you carry a balance; on cards with a revolving balance, every new purchase starts accruing interest immediately. The fifth is missing the actual minimum due date — late fees (typically $25–$41) plus potential penalty APR (often 29.99%) make a missed minimum dramatically more expensive than just paying it. Finally, people often pay the minimum on a high-rate card while keeping money in a 0.5% savings account; the rate differential is so extreme that aggressive payoff almost always beats holding cash beyond an emergency fund.
When should I not use this calculator?
Skip it for cards with unusual minimum-payment formulas (some store cards, deferred-interest promotional cards, charge cards) that don't fit the percent-of-balance or interest+1% structures. Do not use it as a payment-planning tool — minimum is a floor, not a strategy; for real payoff planning use a credit-card payoff calculator that computes the time and interest cost of various payment levels. It is the wrong tool for cards in promotional 0% APR periods; during those windows the minimum is typically just principal-based (no interest accrual), and the formula here overstates it. Avoid it for cards with balance-transfer or cash-advance balances at different APRs — most cards apply payments to the lowest-APR balance first (CARD Act required higher-APR-first only for amounts above the minimum), and the simple formula doesn't account for this. Finally, do not use minimum-payment math to budget — always plan for at least 3× the minimum, and ideally the full statement balance, to avoid the long-tail interest trap.