Minimum payments are designed to keep your account current, not to pay off your balance in a reasonable amount of time. Issuers typically set the minimum as a small percentage of your balance plus interest, which means most of what you pay early on goes toward interest, not principal.
How the math works against you
A common minimum payment formula is around 1–3% of the balance, or a flat minimum dollar amount, whichever is greater. On a balance with a high interest rate, that can mean it takes many years — and multiples of the original balance in interest — to pay it off if you only ever pay the minimum.
Required disclosure box
By law, credit card statements must show how long it will take to pay off your balance at the minimum payment, and the total interest you'd pay. It's worth reading that box every month.
How to get out of the trap
- Pay any fixed amount above the minimum, even a small one — it meaningfully cuts the payoff time and total interest.
- Use our Debt Payoff Calculator to see exactly how a specific extra payment amount changes your timeline.
- If the balance is large relative to your income, look into a balance transfer card or debt consolidation loan to lower the interest rate.
