Minimum Payment
The minimum payment is the smallest amount you can pay on a credit card to keep the account in good standing — often around 2% of the balance. Paying only the minimum is a trap: it stretches repayment over years and can more than double what you pay through interest.
Because the minimum is usually a percentage of the balance — often around 2.5% — it falls every month as the balance does, so the finish line retreats as you approach it. The effect is far larger than it sounds. A $7,800 balance at 19.99% takes about 25 years to clear on a declining 2.5% minimum, costing roughly $13,594 in interest — nearly twice what was borrowed. Hold that same first payment of $195 fixed instead of letting it shrink, and the card is gone in 5 years and 7 months for about $5,156. Simply refusing to let the payment fall saves $8,438 and nineteen years, without finding an extra dollar.
Put it to work
Credit Card Payoff Calculator
How long to pay off your credit card at your current payment — and the exact monthly amount to be debt-free in 12, 24, or 36 months.
Debt Payoff Calculator — Snowball vs Avalanche
Enter up to three debts and compare the snowball and avalanche strategies head-to-head: payoff dates, total interest, and what the difference costs.