Credit Card Calculator Formula & How It Works
Minimum Payment = max(Floor Amount, Balance × Min%) | Interest = Balance × (APR ÷ 12)
- Minimum = typically max($25, 1–2% of balance)
- Interest accrues monthly: Daily Rate = APR ÷ 365
- At minimum payments, payoff takes 15–30+ years on large balances
- Total paid = balance + all interest charges over payoff period
Credit card minimum payments are designed to keep you in debt profitably. At 20% APR and $5,000 balance, minimum payments of ~$100 take over 20 years to pay off, costing $7,000+ in interest. Paying a fixed amount of 3–5× the minimum eliminates the same debt in under 3 years.