The Minimum Payment Trap: What Your Credit Card Company Doesn't Tell You

Credit card companies are required by law to show you how long it will take to pay off your balance if you only make the minimum payment. For many, that number is a wake-up call.

The Math Behind the Trap

Most minimum payments are calculated as 1% of the balance plus the interest for the month. Because interest is often 20% or higher, the vast majority of your payment isn't reducing your debt — it's just paying for the privilege of keeping it.

A Real-World Example

Consider a $5,000 balance at 24% interest:

• Minimum Payment: ~$150.
• Payoff Timeline: ~20+ years.
• Total Interest Paid: ~$8,000 (more than the original debt!).

How to Escape

The only way to win is to stop using the card and pay significantly more than the minimum. Even doubling your minimum payment can cut your payoff time by over 70%.

See your exact timeline with our Credit Card Payoff Calculator.