Credit card minimum payment calculator

What this number means

A minimum payment is not a plan to clear a debt. It is the smallest amount that keeps the account in good standing, and it is calculated from the balance, so it falls every month as the balance falls. That is what makes it slow: the payment shrinks alongside the debt, and the share of it going to principal shrinks with it.

The two figures above are the same debt under the two formulas US issuers actually use. They are not a range or an estimate of uncertainty. They are two different products, and which one you have is written in your cardholder agreement.

This page does not tell you what to pay. What a larger payment is worth against everything else you might do with the money depends on your situation, which a calculator cannot see.

How this is calculated

Percentage plus interest

Each month, in this order:

• Interest is added: balance multiplied by the APR divided by 12.
• The minimum is the stated percentage of the opening balance, plus that month of interest, or the floor if that is larger.
• The payment is subtracted, and the remainder carries forward.

Under this shape the amount going to principal is always the stated percentage of the balance, so the debt always clears eventually.

Flat percentage of the balance

The minimum is the stated percentage of the balance, or the floor if that is larger, with the interest taken out of that amount so the payment already contains it.

Here the payment and the interest are both proportional to the balance, so if the percentage does not exceed the monthly interest rate at the start, it never will. The balance grows without limit and the debt never clears. At a 2 percent minimum, that happens above roughly a 24 percent APR.

Interest and each payment are rounded to whole cents before being applied, because that is what an issuer posts to the account, and it is what makes the rows in the schedule add up to the totals above them.

Method follows the Consumer Financial Protection Bureau's explanation of credit card interest, the disclosure rules in Regulation Z (12 CFR 1026), and the minimum payment disclosure required by the Credit CARD Act of 2009.

What this does not account for

• Your actual minimum formula. This page computes two common shapes. Yours is in your cardholder agreement, and some issuers use variants of neither.
• New spending. Everything here assumes the card is not used again.
• Fees. Late fees and annual fees are added to the balance in reality and are excluded here. A late payment can also trigger a penalty APR, which changes the answer sharply.
• A variable rate. Most US cards track the prime rate, so the APR moves. This models one rate throughout.
• Daily compounding. Issuers use the average daily balance. Over a payoff with no new spending the difference is dollars, not months.

The statement disclosure box required by the CARD Act is the authoritative figure for your own card. This page exists to show how sensitive that figure is to an assumption almost nobody prints.

Questions

Which minimum payment formula does my card actually use?

It is on your statement or in your cardholder agreement, and it is the only reliable source. Two shapes are common in the US. The first is a small percentage of the balance plus that month of interest, often 1 percent plus interest with a floor around 25 to 35 dollars. The second is a flat percentage of the balance with the interest already inside it, often 2 to 4 percent with a floor around 15 to 25 dollars. This page computes both, because the difference between them can be decades.

Why do two calculators give me completely different answers?

Almost always because they assume different minimum payment formulas and neither says so. A flat percentage of the balance clears far more slowly than a percentage plus interest, because as the balance falls the payment falls with it while the interest share of that payment stays roughly constant. At a high enough rate a flat percentage never clears the debt at all.

Can a minimum payment really never pay off the balance?

Yes, under a flat percentage minimum. At 2 percent of the balance against a 27.9 percent rate, the monthly interest is about 2.325 percent of the balance, so the payment never covers it and the balance grows. This is not a hypothetical: it is what the arithmetic does, and this page says never rather than reporting a very large number of years.

Why does my minimum payment go down every month?

Because it is calculated from the balance, and the balance is falling. That is the mechanism that makes minimum payments so slow: the payment shrinks alongside the debt, so the amount going to principal shrinks too. Paying a fixed amount instead of the minimum is what breaks that.

Does the CARD Act not require the minimum to pay it off?

The Credit CARD Act of 2009 requires issuers to print a box on your statement showing how long the balance takes at the minimum and what a payment that clears it in three years would be. It requires the disclosure, not a minimum that clears the debt in any particular time. The disclosure box on your statement is the authoritative version of what this page estimates.