Why Minimum Payments Keep Debt Around for Years
A credit card minimum payment is typically a small percentage of the balance, or a fixed floor, whichever is larger. The Credit Card Payoff Calculator shows what paying it costs in time and interest.
Why a percentage never finishes
A minimum of 2 per cent of the balance means that as the balance falls, the payment falls with it. The debt shrinks ever more slowly - the arithmetic of a percentage approaches zero without reaching it, which is why cards have a floor of a few pounds to stop it taking literally forever.
On a 5,000 balance at 22 per cent with a 2 per cent minimum, the first payment is 100 - of which roughly 92 is interest. About 8 comes off the balance. The next payment is slightly smaller, because the balance is slightly smaller.
Paid that way, the balance takes decades to clear and the total interest paid exceeds the original debt, often by a long way. This is not a quirk; it is what the structure produces.
What a fixed payment changes
Keep paying the original minimum as a fixed amount - 100 a month rather than 2 per cent - and the same debt clears in roughly seven to eight years with far less interest.
Pay 200 a month and it clears in about two and a half years. Doubling the payment cuts the time by far more than half, because every extra pound goes entirely against the principal and removes all the future interest that pound would have generated.
That non-linearity is the useful fact. Small increases in payment produce disproportionate reductions in total cost, which is the opposite of how it feels.
Order matters when there are several
Two approaches, and both work better than paying minimums on everything.
Highest interest rate first costs the least in total. It is mathematically optimal.
Smallest balance first clears individual debts sooner, which some people find easier to sustain. It costs a little more and the behavioural benefit is real.
Either beats spreading payments evenly. The one thing to avoid is paying extra into a low-rate debt while a high-rate one accrues.
The thing worth knowing about a 0 per cent offer
A balance transfer at 0 per cent can save a great deal of interest, and it has two traps. There is usually a transfer fee of a few per cent, which is still often worth it. And new spending on the card may not be at 0 per cent, while payments are generally applied to the cheapest debt first in some jurisdictions - so new purchases can sit accruing interest while you clear the transferred balance.
If a card balance is genuinely unmanageable, that is a situation for free debt advice rather than a calculator - most countries have non-profit services for exactly this, and they can do things a spreadsheet cannot.
Common questions
Does paying the minimum hurt my credit score?
Paying on time helps it. High utilisation relative to the limit tends to hurt it regardless.
Is it better to pay weekly?
Marginally, since interest is usually calculated daily. The amount matters far more than the frequency.
Why is my balance barely moving?
Because almost all of the minimum is interest. That is the arithmetic above.
Want to see what a balance actually costs?