Researching
How minimum payments are calculated
The two formulas all major US issuers use, with worked examples for each.
Read →A reader's calculator · The minimum payment trap, in numbers
A $5,000 balance at 22% APR, paying the interest-plus-1% minimum, costs $8,100 in interest over 19 years, 2 months.
Not because you are bad with money. Because the formula is built to keep you paying. Type your numbers below and see exactly what your card is doing.
Sources
WalletHub 2026 Q1, Federal Reserve G.19. Independent. No affiliate bias.
Your numbers
LiveExtra payment per month$0
$0$250$500
If you only pay the minimum
19 yr 2 moto clear the balance
Interest paid
$8,100
Total paid
$13,100
Your escape payment
$191/moto be debt-free in 36 months
Pay this fixed amount every month and the $5,000 balance clears in three years. You will pay $1,874 in interest, saving $6,226 versus the minimum-only path.
Three roads out
Same balance, three payment plansMinimum only
19 yr 2 mo
$8,100 in interest
Lock first month's payment
4 yr 10 mo
$3,121 interest, save $4,979
Escape plan (36 mo)
36 months
$191/mo · save $6,226
The middle column locks the first month's minimum and never lets it shrink. The right column is the fixed monthly payment that clears the balance in three years. Both beat the minimum-only path by years.
Section II
Why the minimum is designed to keep you paying for a decade
The minimum payment is not a recommendation. It is the smallest amount your issuer will accept without marking the account late. As your balance falls, the minimum falls with it. Less goes to principal each month, more of every payment is interest, and the loan stretches across years that compound the bank's earnings while compressing yours.
- The minimum is a percentage of your current balance. At 2%, a $5,000 statement triggers a $100 payment. The lower your balance gets, the lower this number gets.
- Interest is calculated daily, not monthly. The bank applies the daily periodic rate to your average daily balance. At 22% APR, every $1,000 you carry costs about $0.60 a day. A balance you carry for the full month costs about $18 per $1,000.
- As the minimum shrinks, principal reduction shrinks faster. By year five on a $5,000 balance, your minimum has fallen to roughly $76 per month. Of that, about $70 is interest. About $6 is principal. The number on the statement looks like progress. The math is treadmill.
- The fix is not paying more. It is not paying less. Lock the first month's minimum and never let it shrink. That single behavioural change shaves years off the timeline at zero extra dollars committed up front.
For the full mechanics including the by-issuer formulas, see how minimum payments are calculated. For the deep editorial on why the system works this way, see the minimum payment trap.
Section III
What it costs at common balances
Interest-plus-1% method at 22% APR (the 2026 US average). Floors of $25 apply. See the full table for the lookup.
Balance$2,000
- First-month minimum
- $57
- Months to clear at minimum
- 11 yr 7 mo
- Interest you would pay
- $2,600
The original $2,000 of spending becomes $4,600 paid back.
Balance$5,000
- First-month minimum
- $142
- Months to clear at minimum
- 19 yr 2 mo
- Interest you would pay
- $8,100
The original $5,000 of spending becomes $13,100 paid back.
Balance$10,000
- First-month minimum
- $283
- Months to clear at minimum
- 24 yr 11 mo
- Interest you would pay
- $17,266
The original $10,000 of spending becomes $27,266 paid back.
Section IV
Read further, by direction
Three groups read this site: people calculating, people researching, people planning. The links below are sorted by what you came here to do.
Researching
Average minimum payment percentage (2026)
What the 2% standard actually means in dollars at 2026's higher APRs, with the by-issuer table.
Read →Researching
The minimum payment trap
Why a system that keeps your account current can also keep you in debt for nine years.
Read →Planning
How to pay off faster
Five strategies with the math, ranked by how much they actually save on a $5,000 balance at 22% APR.
Read →Planning
Avalanche vs. snowball
When the math wins and when the motivation wins. A two-card worked example with the gap quantified.
Read →Planning
Balance transfer comparator
Side-by-side: keep paying the current card vs. transfer to 0% intro APR. Includes the transfer-fee break-even.
Read →Calculating
Minimum payment by balance
Pre-calculated table for $500 to $20,000 with both formulas, payoff time, and total interest.
Read →Calculating
Frequently asked
The thirty-or-so questions that come up around minimums, late payments, score impact, and escape strategies.
Read →Cross-portfolio
0% balance transfer cards
Our companion site that tracks current 0% intro APR offers, transfer fees, and qualifying credit score by card.
Read →Section V
The five most-asked questions
For the full set, see the FAQ.
How is the minimum payment on a credit card calculated?
Most US issuers use one of two formulas. The flat-percentage method takes 1% to 3% of your balance (most commonly 2%) with a floor of $25 to $35. The interest-plus-principal method takes all monthly interest plus 1% of the balance. The exact terms are disclosed in your cardholder agreement, which you should always check.
How long does it take to pay off $5,000 paying only the minimum?
At 22% APR using the interest-plus-1% formula (with the standard $25 floor), $5,000 takes about 19 years 2 months to clear and costs roughly $8,100 in interest, so the original $5,000 of spending becomes $13,100 paid back. On the flat 2% method at the same APR, the math runs into negative amortisation: the minimum barely covers interest, so the balance drags out for decades. Read your cardholder agreement to see which formula your card uses.
Will my credit score drop if I only pay the minimum?
Paying the minimum on time keeps the account current and protects your payment history (35% of your FICO score). The bigger score drag is utilisation: a high balance against your credit limit suppresses your score, and minimum payments barely move the balance. So the minimum protects payment history but costs you on utilisation.
What is the minimum payment on a $10,000 credit card balance?
At a 2% flat method: $200. At interest-plus-1% on a 22% APR card: about $283 (the $183 of monthly interest plus $100 of principal). Both are above the typical $25 to $35 floor, so the floor does not apply at this balance.
How much do I save by paying $50 extra each month?
On $5,000 at 22% APR using the interest-plus-1% method, an extra $50 a month cuts the payoff from about 19 years 2 months to about 5 years 7 months and saves roughly $5,270 in interest. Extra payments are most powerful early because they reduce the principal that generates future interest.
Disclaimer. This calculator is for educational purposes only. Results are estimates based on the inputs you provide and standard minimum payment formulas. Actual minimum payments may vary by card issuer, billing cycle, and account terms. We are not affiliated with any credit card issuer, bank, or financial institution. This is not financial advice. Always refer to your card agreement for exact terms.