How this calculator works
Credit card minimum payments are usually the larger of a fixed floor and a percentage of the statement balance, so they shrink as the balance falls. A 2% minimum on a $4,000 balance starts at $80 and eventually drops to the floor. Because the payment falls with the balance, a card paid at the minimum can take decades to clear and cost more in interest than the original balance. Adding a fixed amount on top keeps the repayment pace steady. The model compounds monthly at one twelfth of the APR and assumes no new purchases, fees or penalty rate.
Formula
i = APR / 12. Minimum each month = max(floor, opening balance × percentage). Payment = min(minimum + extra, balance + interest). Balance next month = balance + balance × i - payment. Payoff months are counted until the balance reaches zero; interest saved is the minimum-only interest minus interest with the extra payment.
Worked example
A $4,000 balance at 19.99% with a 2% minimum and a $25 floor starts at $80 a month and takes 456 months to clear, costing $15,166.38 in interest. Paying an extra $50 a month cuts the term to 67 months and the interest to $2,268.33, saving $12,898.05 and 389 months. The schedule table lists the plan that includes the extra payment.
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Frequently asked questions
Why is the minimum payment allowed to fall so low?
Issuers calculate it as a percentage of the statement balance, so it tracks the debt downward. A low minimum protects the account from default but is not designed to repay the principal quickly.
What is the floor for?
The floor stops the percentage from producing a payment too small to cover a month of interest, which would let the balance grow. Typical floors are $10 to $35.
Does the extra payment go to principal?
Interest is charged first, then the rest reduces principal, exactly as with the minimum alone. The extra simply reduces the balance faster, which lowers each later interest charge.
Should I pay the minimum on every card?
Paying every minimum avoids fees and keeps accounts current. Direct any spare money to one card at a time; the debt payoff calculator compares snowball and avalanche orders.