Credit Card Payoff Calculator: Minimum Payment vs Fixed Payment
Paying only the minimum on a credit card balance is one of the costliest financial habits there is. Issuers design minimum payments to keep balances outstanding as long as possible, maximizing the interest they collect. This calculator lets you compare two strategies side by side: paying the minimum each month (recalculated as a percentage of the remaining balance) versus committing to a fixed monthly payment. Enter your current balance, the annual percentage rate on your card, the minimum payment percentage and floor your issuer uses (check your statement), and a fixed payment amount you could realistically make each month. The calculator shows months to payoff, total interest paid, and total amount paid under each method, as well as the interest savings from choosing the fixed payment route. The difference is often striking: a $5,000 balance at 20% APR can take more than 20 years on minimum payments and cost over $6,000 in interest alone, while a fixed $200 monthly payment clears the same debt in under three years at a fraction of the interest cost.
Formulas
Monthly rate = APR / 12 / 100
Minimum payment (each month) = max(balance x min_pct / 100, min_floor) [recalculated on remaining balance each month]
Fixed payment months = -ln(1 - balance x monthly_rate / payment) / ln(1 + monthly_rate)
Minimum payment method: iterative simulation month by month (up to 600 months)
Each month: interest = balance x monthly_rate; payment = max(balance x min_pct / 100, min_floor)
If payment >= balance + interest, final payment = balance + interest and done
Total interest = sum of all interest charges across all months
Total paid = starting balance + total interest
Interest savings = total interest (minimum) - total interest (fixed)
How to use this calculator
- Enter your current credit card balance.
- Enter the APR from your card statement (usually listed as the "Purchase APR").
- Enter the minimum payment percentage your issuer uses. Check your statement or card agreement; 2% is common.
- Enter the minimum payment floor. This is the lowest dollar amount the issuer will charge as a minimum (often $25 to $35).
- Enter the fixed monthly payment you can commit to making each month.
- Compare the two columns side by side. The interest savings row shows how much the fixed payment route saves you over the life of the debt.
Frequently asked questions
Why does minimum payment take so long to pay off a balance?
With a percentage-based minimum (typically 1% to 2% of the balance plus interest, or a flat minimum), most of each payment covers interest, leaving very little to reduce principal. As the balance shrinks, so does the minimum, further slowing payoff. A $5,000 balance at 20% APR can take over 20 years on minimums alone.
How is the minimum payment calculated?
Most credit card issuers use one of two methods: a flat percentage of the ending balance (commonly 1% to 2%) plus all interest and fees accrued that month, or a percentage of the balance (commonly 2%) but not less than a floor amount (often $25 to $35). Your card agreement specifies the exact method.
What is the fastest way to pay off credit card debt?
Paying more than the minimum is essential. Even $50 extra per month can cut years off a typical balance. Beyond that, the avalanche method (highest APR first) minimizes total interest; the snowball method (lowest balance first) builds momentum. Transferring to a 0% promotional APR card can also eliminate interest during the promotional period.
Does paying the minimum hurt my credit score?
Not directly. On-time minimum payments keep your account current. However, a high credit utilization ratio (balance relative to credit limit) does negatively affect your score. Paying down the balance improves utilization and, with time, your score.
Can I use this calculator for store cards or personal loans?
This calculator is designed for revolving credit (credit cards) where the minimum payment recalculates each month as a percentage of the balance. Personal loans use level installment payments, which are a fixed amount throughout the term. For fixed installment loans, use the loan payoff calculator instead.
Official sources
- CFPB: How is a minimum payment calculated: consumerfinance.gov.
- Federal Reserve: Consumer Credit (G.19 Statistical Release): federalreserve.gov/releases/g19.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.