Credit card guide
Credit Card Minimum Payment Explained
Paying only the minimum looks manageable, but it can keep a balance alive for a long time and make the true cost of credit much larger than expected.
Why minimum payment is risky
- Most of the payment may go to interest, not principal.
- The balance can shrink very slowly when the rate is high.
- Fees and new purchases can make repayment even harder.
What to compare instead
Instead of looking only at the minimum due, compare the monthly payment, total cost, and the time needed to pay off the balance.
If you want to reduce repayment pressure, use the calculator to test a faster payoff plan and compare it with a minimum-payment scenario.