Minimum payments are a financial "treadmill." They give you the feeling of progress because you've made a payment, but they are mathematically designed to keep you in debt for as long as possible. If you only pay the minimum on a $5,000 balance, you could be paying it back for over 20 years.
The Anatomy of a Minimum Payment
Most credit card companies calculate your minimum payment by taking a small percentage of your balance (often 1-2%) and adding the current month's interest. This isn't a "suggested" payment—it's a retention strategy.
| Scenario ($5k Balance at 22%) | Total Interest Paid | Time to Pay Off |
|---|---|---|
| Only Minimum Payments | $7,800+ | 22 Years |
| Fixed $250 / Month | $1,350 | 2.1 Years |
Why the First $20 is the Most Important
Every dollar you pay above the minimum goes directly toward your principal balance. This creates a reverse-compounding effect: a smaller principal means less interest next month, which means more of your next payment goes to principal.
See the Real Cost of Your Debt
Use our Loan Repayment Calculator to see how much time and money you save by adding just $50 or $100 to your monthly payment.
3 Steps to Break the Cycle
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1
Stop the Bleeding
You cannot put out a fire while pouring gasoline on it. Stop using the cards immediately while you are in the payoff phase.
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2
Pick Your Strategy
Use the Debt Avalanche to target high interest rates or the Debt Snowball to clear small balances for psychological momentum.
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3
Automate Your Overpayment
Set your autopay to a fixed amount (e.g., $200) rather than the "Minimum Amount Due." This ensures your balance actually drops every month.
Expert Tip: Always check your "Interest Saving" potential. Our calculators show that even rounding your payment up to the nearest $50 can shave years off your debt timeline.
Ready to take control?
Use our professional-grade tools to visualize your strategy and speed up your progress.
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