Paying only the minimum on a $5,000 card at 19.99% takes 523 months (43.6 years) and $20,151 in interest. A fixed $200 a month clears it in 33 months.
Why the minimum payment drags on
The minimum is a percentage of the balance, with a small floor. As the balance falls, so does the payment, and most of each early payment goes to interest rather than the debt.
Here the minimum is 2% of the balance with a $25 floor. That slow shrinking is why the debt lasts 43.6 years and costs $20,151 in interest.
A fixed payment changes the outcome
Paying a fixed $200 a month, the same card is gone in 33 months with $1,521 in interest. That saves $18,630 and 490 months compared with the minimum.
Raising the fixed payment to $300 ends it in 20 months with $906 in interest. The table shows five payment levels.
Run your own card
Enter your balance, rate and payment in the credit card minimum payment trap calculator to see your own comparison. The rate on your statement is the one to use, and a payment must exceed the monthly interest or the balance never falls.
| Monthly payment | Months to pay off | Total interest |
|---|---|---|
| $100 | 109 | $5,830 |
| $150 | 50 | $2,357 |
| $200 | 33 | $1,521 |
| $300 | 20 | $906 |
| $500 | 12 | $515 |
FAQ
How long to pay off $5,000 at the minimum?+
About 523 months, or 43.6 years, with $20,151 in interest at 19.99%.
How much does a fixed payment save?+
A fixed $200 a month saves $18,630 in interest and 490 months versus the minimum.