Minimum Payment Calculator

Last updated July 2, 2026

The minimum payment on a credit card is designed by the issuer to maximize long-term interest revenue, and understanding the mechanics makes the trap visible. Most cards calculate the minimum as the greater of a flat floor (typically $25 to $40) or a percentage of the outstanding balance (usually 1 to 3 percent, plus all accrued interest). At the most common formula — 2 percent of the balance plus interest — a $6,000 balance at 22 percent generates a minimum payment of approximately $230. Of that $230, roughly $110 is interest and $120 reduces principal. The following month, interest accrues on $5,880, and the cycle continues. At this pace, the $6,000 balance takes over 20 years to pay off and generates more than $8,000 in additional interest — 133 percent of the original balance paid just in interest charges.

The CARD Act of 2009 requires every credit card statement to include a minimum payment warning that shows exactly how long payoff takes at minimum-only payments and what the total cost will be. This disclosure is legally mandated because Congress recognized that minimum payments are so mathematically damaging that consumers need explicit notice. Most people glance past it. The calculation is most compelling when shown in two columns: what minimum payment discipline produces over 20 years versus what a modest fixed payment — perhaps $250 or $300 per month — produces instead. The difference is typically $6,000 to $10,000 in interest and 15 to 18 fewer years of debt.

Look at the minimum payment warning on every credit card statement you receive — it's the most honest disclosure in consumer finance. If you're carrying a balance, calculate what your current monthly payment will cost in total over the full payoff period, then calculate what a payment 50 to 100 dollars higher would cost. The comparison almost always reveals that a small additional payment is the highest-return financial decision available.