Minimum Payment Trap Calculator
See the true cost of making only minimum payments on your credit card — including total interest paid and years to payoff — so you can compare it against a fixed higher payment.
About this calculator
Credit card issuers typically set your minimum payment as a percentage of your outstanding balance (e.g., 2%) or a fixed floor amount (e.g., $25), whichever is greater. Because the minimum payment shrinks as your balance falls, you pay less each month over time — but interest continues accruing on the full remaining balance. This calculator simulates the month-by-month amortization: each month, interest = balance × (APR/100/12) is added, then minPayment = max(balance × minPaymentPercent/100, minPaymentFloor) is subtracted. Total interest is the sum of all monthly interest charges until balance < $0.01. The trap is that a $5,000 balance at 20% APR on minimum payments can take over 20 years and cost thousands in interest.
How to use
Assume a $3,000 balance at 19% APR, minimum payment = 2% of balance, floor = $25. Month 1: interest = 3000 × (0.19/12) = $47.50; minPayment = max(3000 × 0.02, 25) = $60; new balance = 3000 + 47.50 - 60 = $2,987.50. Month 2: interest = 2987.50 × 0.01583 = $47.30; minPayment = max(59.75, 25) = $59.75; new balance ≈ $2,975.05. This loop repeats for approximately 189 months (15+ years), accumulating roughly $2,100 in total interest — more than 70% of the original balance.
Frequently asked questions
Why does making only minimum payments take so long to pay off a credit card?
Minimum payments are designed as a percentage of your current balance, so as the balance falls, so does your payment. This means the rate at which you reduce the principal slows down over time, while interest continues to compound on whatever remains. On a $5,000 balance at 20% APR with a 2% minimum, your first payment might be $100, but ten years later it could be under $30 — even though the balance is still significant. The result is a decades-long repayment cycle that maximizes revenue for the card issuer.
How much extra interest do I pay by making minimum payments instead of a fixed amount?
The difference can be staggering. A $4,000 balance at 21% APR paid at the 2% minimum takes roughly 20 years and costs about $5,800 in interest — more than the original debt. Paying a fixed $150/month instead clears the same balance in about 34 months with only $1,000 in interest. That is a savings of nearly $4,800 by simply committing to a fixed payment. Even fixing your payment at the amount of the first minimum payment prevents the payment from shrinking and cuts years off the timeline.
What is the minimum payment floor on a credit card and why does it matter?
The minimum payment floor is the lowest dollar amount your issuer will accept as a minimum payment, regardless of what the percentage calculation yields. Common floors are $25 or $35. The floor matters most when your balance is very low — for example, 2% of a $500 balance is only $10, but the floor ensures you still pay at least $25. Without a floor, minimum payments could become so small that they barely cover interest charges and the debt would never fully resolve. Always check your card agreement for both the percentage and the floor.