See the cost of minimum payments vs paying more.
Minimum-only payoff
—
—
Custom payoff
—
—
Saved by paying more
—
Your breakdown
Updates live as you type| Strategy | Payoff time | Interest paid |
|---|
Worked example
Take a $5,000 balance at a 22% APR. If you pay a fixed $200 a month, the card clears in about 34 months, which is 2 years and 10 months, and you pay roughly $1,750 in interest along the way. Compare that to paying only the typical 2% minimum. In the first month the minimum is just $100, but the interest charge is $5,000 times 22% divided by 12, or about $91.67, so only $8.33 actually reduces the balance. Because the minimum shrinks as the balance does, the payment keeps tracking just above the interest, and the balance barely moves. On the minimum alone this debt does not meaningfully amortize, which is exactly why the minimum-only result reads as 100 or more years. The practical takeaway is stark: a fixed extra payment that does not fall with the balance is what actually retires the debt, and the higher the APR, the more dramatic the difference.
How it is calculated
The tool simulates the card month by month. Each month it adds interest equal to the balance times the APR divided by 12, then subtracts your payment, and repeats until the balance is gone. For the minimum-only path the payment each month is a percentage of the current balance, so it falls as the balance falls, which is why high-rate balances on minimums can take an extraordinarily long time to clear. For the custom path the payment is a fixed dollar amount you choose, which keeps chipping away at principal at a steady pace. Interest saved is the difference in total interest between the two paths. The simulation caps at 1,200 months, so any balance that has not cleared by then is reported as 100 or more years rather than a precise figure, because in practice a payment that only matches the interest never pays the card off. The model assumes a fixed APR and no new purchases, so adding charges resets the timeline.