How this minimum payment calculator works
This simulator models the standard minimum-payment formula — the greater of a fixed dollar floor or a percentage of the balance plus that month's interest — then amortizes month by month at your APR. Small changes in payment size matter enormously: raising a $125 payment to $200 typically more than halves both the timeline and total interest. Numbers assume no new charges; fees and penalty APRs will worsen the real outcome.
Frequently asked questions
How do credit card companies set minimum payments?
Most networks use max($25–$40 floor, 1–2% of balance + accrued interest + fees). That's why early minimum payments are almost all interest: on a $5,000 balance at 21% APR, roughly $87.50 of a typical $125 payment goes straight to the bank.
Why does paying the minimum take so long?
As the balance shrinks, the 1–2% percentage-based payment shrinks with it, and the payment converges toward the dollar floor. Once you're near the floor the math becomes a slow grind — many cards take 20+ years and pay about as much interest as the original debt.
What payment actually clears it in 3 years?
Use the rule of thumb: divide the balance by your target months. $5,000 over 36 months ≈ $139/month plus interest — so budget about $160–170/month to stay safe. Any fixed payment above the interest-only amount (about $87.50 at 21% on $5,000) will eventually clear the debt; this calculator uses the bank's own minimum rule.