Borrowing

Credit Card Payoff

Minimum payments versus a fixed payment. See how long each takes and what the interest costs.

Why the minimum payment takes so long

Card issuers set the minimum at roughly the month's interest plus 1% of the balance. As the balance shrinks, so does the minimum. That keeps payments low but stretches payoff over many years. On a $6,500 balance at 24% APR, paying only the minimum takes well over a decade and costs more in interest than the original balance.

Choosing a fixed amount and sticking to it breaks that cycle. The payment stays the same while the interest share falls each month, so more goes to principal.

Other ways to cut the cost

A 0% balance-transfer card can pause interest. Watch the transfer fee, usually 3–5%, and the date the promo rate ends.
Call your issuer and ask for a lower APR. It works more often than people think, especially with a good payment history.

Common questions

How long does it take to pay off a credit card with minimum payments?

Often decades. A $6,500 balance at 24% APR paid with minimums of interest plus 1% of the balance takes about 21 years and costs nearly $12,000 in interest.

How is the credit card minimum payment calculated?

Most U.S. issuers use the month's interest plus about 1% of the balance, with a small floor such as $25. Because it shrinks as the balance falls, payoff stretches out for years.

Is a balance transfer worth it?

A 0% balance transfer can stop interest for 12 to 21 months. Weigh the 3–5% transfer fee, and pay enough each month to clear the balance before the promotional rate ends.