How to Use This Tool
Enter the balance, the rate and the minimum formula from your statement. The two middle cards are the same first payment treated two different ways.
The minimum is a percentage of a moving target
A typical minimum is the greater of a flat floor, often $25, and a percentage of the current balance, often 2 per cent. Because it is recalculated against the balance every month, it falls as the balance falls.
That is the trap. You are always paying 2 per cent of a shrinking number, so the balance decays towards zero without arriving, and the interest keeps accruing on what is left. The floor eventually takes over and finishes the job, which is why the answer is finite rather than infinite — but only after decades.
$5,000 at 22% APR, minimum = max($25, 2% of balance) first month's minimum $100.00 paying the minimum each month 968 months = 80.7 years interest $43,419 paying a fixed $100 each month 137 months = 11.4 years interest $8,678 difference 831 months and $34,741
Freezing the payment is the whole fix
The common advice is "pay more than the minimum", which sounds like it requires money you do not have. The stronger and cheaper version is pay the same amount every month — specifically, whatever this month's minimum is — and never let it decline.
That costs nothing extra in month one and almost nothing in month two. By month sixty the required minimum has fallen a long way and you are simply still paying what you were already paying, which is where the entire saving comes from.
Why the arithmetic feels wrong
At 22 per cent, monthly interest on $5,000 is about $91.67. A $100 minimum therefore reduces the balance by roughly $8 in the first month. Almost the whole payment is interest, and it stays that way for years, which is why progress feels invisible even when you never miss a payment.
The parts this model leaves out
Real cards vary: some compute the minimum as 1 per cent of the balance plus that month's interest and fees, which behaves differently. Promotional rates expire and jump. Fees are added to the balance. And any new spending on the card restarts everything, which is the single fastest way to make a payoff plan meaningless.
If the numbers here look impossible
An interest charge that exceeds what you can pay each month is a situation arithmetic cannot solve, and it is more common than people admit. Non-profit credit counselling services exist in most countries and are free or low cost; a balance transfer or a consolidation loan can also change the rate the maths runs at. This page can tell you what the numbers do, but not what you should do about them.
