Minimum Payment Calculator

How issuers calculate your minimum payment

There's no single legal standard every issuer follows, but a common formula is the greater of two amounts:

• A flat floor, often $25 to $35, that applies to small balances so the minimum never drops to a trivial amount.
• That month's interest charge plus a percentage of your balance, commonly 1% to 3% depending on the issuer.

Why the minimum payment gets smaller over time

Because the formula above is a percentage of your current balance, not your original balance, each payment that reduces your balance also reduces next month's required minimum. That sounds convenient, but it's exactly what stretches out a minimum-only payoff for years: a shrinking required payment means a shrinking share of each payment goes to principal relative to a fixed payment plan, so the balance takes far longer to reach zero than a simple 'balance divided by payment' estimate would suggest. This calculator's simulation recalculates the minimum every single month, the same way a real statement would, rather than assuming a fixed payment throughout, which is what makes the payoff time and total interest figures realistic instead of optimistic.

Worked example: how expensive minimum-only really is

A $5,000 balance at 24.99% APR, using the 1%-of-balance version of the formula, has a minimum payment of about $154 this month. Left on minimum-only payments the whole way, following the same formula every month as the balance shrinks, it takes roughly 236 months, just under 20 years, to reach zero, and racks up around $9,278 in total interest along the way, nearly double the original balance. Switching to a 2%-of-balance formula on the same numbers cuts that to about 139 months (11.6 years) and roughly $4,822 in interest; a 3% formula cuts it further to about 102 months (8.5 years) and roughly $3,277 in interest. The percentage your issuer uses matters enormously, and paying anything above the minimum, even a modest fixed amount, shortens all three scenarios dramatically, which is exactly what the comparison table on the credit card interest calculator shows for any payment you enter.

What actually happens if you only pay the minimum

Nothing goes wrong in the sense of a missed payment, your account stays in good standing and nothing is reported negatively, as long as the minimum is paid on time every cycle. What happens instead is purely a cost problem: the bulk of each payment for a long stretch goes toward interest rather than principal, especially early on when the balance (and therefore the interest charge) is highest. The main interest calculator's side-by-side comparison table is built specifically to make that cost visible in dollars and months, rather than leaving it as an abstract warning.

Minimum payments on a cash advance work the same way

The formula above applies to any card balance, including a cash advance, which typically carries a higher APR and starts accruing interest immediately (see the cash advance interest calculator for that specific math). Nothing you enter on this page is sent anywhere either, every number stays in your browser, see the privacy policy for the full explanation.