- A minimum payment declines with the balance, so it never gains the momentum a fixed payment does.
- Freezing the payment at today’s minimum — paying the same dollar amount every month — is usually worth more than a rate reduction.
- At a low enough percentage rule, a high-rate balance does not realistically clear at all, which is why this page reports "over 70 years" rather than a date.
- Your card’s actual minimum rule is in the cardholder agreement — enter it here rather than assuming a standard one, because there is not one.
How a minimum payment works
A credit card minimum is not a fixed amount. It is normally a formula: a percentage of what you owe, with a dollar floor so it never falls below a token sum. As the balance falls, so does the required payment — which sounds generous and is the entire problem.
A fixed payment amortizes: every month the interest charge is smaller, so more of the same payment attacks the principal and the balance accelerates towards zero. A declining payment does the opposite. It shrinks in step with the balance, so the ratio between the payment and the interest charge barely improves, and the acceleration never arrives.
That is why the same balance can take three or four years to clear at a fixed payment and nearly twenty at the minimum — and why, at a low enough percentage, it can fail to clear in any timeframe worth naming.
The math
The minimum-payment rule is entirely yours to set: a percentage of the balance, a dollar floor, and the greater of the two applies. Nothing about any particular card is hardcoded, because a minimum-payment rule is a contract term that varies by issuer, card and jurisdiction, and asserting one here would be stating a fact this page has no source for.
Each month the calculator strikes the minimum against the balance before that month’s interest is added — which is how a statement minimum is normally calculated — then adds the interest and subtracts the payment. It runs until the balance clears, or until seventy years have passed, at which point it reports "over 70 years" rather than a number that came from a loop giving up.
The comparison arm freezes the payment at today’s minimum and never lets it fall. Same first payment, same rate, same balance: the only difference is that one amount declines and the other does not. That isolates the effect of the declining rule from the effect of paying more, which is the point of the exercise.
Worked example
A $6,500 balance at 21.99%, with a minimum of 3% of the balance floored at $25. The first minimum is $195 — of which $119 is that month’s interest. Paying that shrinking minimum every month clears the balance in 227 months: eighteen years and eleven months, and $9,360 of interest. You pay $15,860 in total for $6,500 of spending.
Now freeze the payment at that same first $195 and change nothing else. The balance clears in 52 months — four years and four months — for $3,634 of interest. The same starting payment, paid consistently instead of allowed to shrink, saves $5,726 and fourteen and a half years. And lower the rule to 2% of the balance, which some cards use: the balance no longer clears within any horizon worth reporting.
Key terms
- Minimum payment
- The least you can pay without the account falling into arrears. Normally the greater of a percentage of the balance and a dollar floor, set by your cardholder agreement.
- Declining payment
- A payment defined as a share of the balance, so it shrinks as the balance does. It is the mechanism behind a decades-long payoff at an ordinary card rate.
- Fixed payment
- The same dollar amount every month regardless of balance. It amortizes: the interest share falls each month while the payment does not, so the payoff accelerates.
- Dollar floor
- The minimum minimum — the amount the percentage rule can never take the payment below. On a small balance it is the only thing making any progress at all.