Credit Card Minimum Payment Calculator

Related Calculators

Table of contents

• How to use
• Common mistakes
• Definitions
• Methodology
• Limitations & assumptions
• Sources

Current balance ($): The credit card amount you expect to carry into the payoff plan.

APR (percent): Annual percentage rate. It is the yearly interest rate used for credit card cost comparisons [2].

Minimum payment rule: The card's method for estimating the smallest required monthly payment.

Balance percent for minimum (percent): The percent of the balance used in the minimum payment rule.

Smallest minimum payment ($): The dollar floor for the minimum payment. Near the end, the calculator pays only the amount still owed.

Payment to clear it in about 3 years: A steady monthly payment estimate for paying the starting balance in 36 months, before future purchases.

Interest saved with your extra payment: The minimum-only interest minus the interest from the plan with Extra paid each month ($).

Mistake: Using the full statement balance in Current balance ($) even though part of it will be paid in full.
Fix: Enter only the balance you expect to carry after the due date.

Mistake: Typing APR (percent) as a monthly rate instead of the yearly credit card APR.
Fix: Enter the annual rate from your statement, such as 24.99, not 2.08.

Mistake: Choosing the wrong Minimum payment rule for your card.
Fix: Check whether your agreement says percent of balance or interest plus a percent of balance, then pick the matching rule.

Mistake: Leaving Balance percent for minimum (percent) blank or entering a dollar amount there.
Fix: Enter only the percent number, such as 1, 2, or 3.

Mistake: Entering Smallest minimum payment ($) as the usual payment you choose to make.
Fix: Use the card's fixed dollar floor, such as 25 or 35. Put voluntary extra money in Extra paid each month ($).

Mistake: Leaving New charges each month ($) above 0 when you want a no-new-spending payoff estimate.
Fix: Set New charges each month ($) to 0 if you plan to stop using the card while paying it down.

• The estimate uses APR divided by 12 for monthly interest. Many card issuers calculate interest daily, so a real statement can differ.
• The calculator does not include late fees, annual fees, cash advance fees, penalty APR changes, returned-payment fees, or promotional-rate expiration.
• The 3-year target uses the starting balance only. It does not include New charges each month ($) or future purchases.
• The payoff loop stops at 1200 months, equal to 100 years. If the balance is not paid off by then, the result is treated as beyond the calculator limit.
• If New charges each month ($) plus interest are too high compared with the payment rule, the balance may not go down.
• Your issuer's actual minimum payment may use rounding, fees, past-due amounts, or other rules not entered here.

Monthly interest

The calculator converts APR (percent) to a monthly rate by dividing by 100 and then by 12. This is a planning estimate; credit card companies may use daily balance methods when calculating actual interest [1].

monthly_rate = apr_percent / 100 / 12

interest = balance * monthly_rate

Minimum payment rules

For Percent of balance, with a $ floor, interest is added first. The scheduled minimum is the larger of the balance percent amount and Smallest minimum payment ($).

scheduled_minimum = max(balance_before_payment * min_percent / 100, min_floor)

For Interest plus percent of balance, with a $ floor, the scheduled minimum is the larger of that month's interest plus the balance percent amount, or Smallest minimum payment ($).

scheduled_minimum = max(interest + balance * min_percent / 100, min_floor)

Payoff loop

Each month, the calculator adds interest and New charges each month ($), then subtracts the required minimum plus Extra paid each month ($). The last payment is capped so it does not pay more than the amount owed.

balance_before_payment = balance + interest + monthly_new_charges

payment = min(balance_before_payment, scheduled_minimum + extra_payment)

ending_balance = balance_before_payment - payment

The loop repeats until the balance is below $0.005 or until 1200 months have passed. Total interest is the sum of monthly interest charges. Total paid is the sum of all payments.

3-year target payment

The steady 36-month payment uses the standard installment payment formula. If APR is 0, it divides the balance by 36. The displayed target is never lower than the First minimum payment.

if monthly_rate = 0 then payment_36 = balance / 36

otherwise payment_36 = balance * monthly_rate / (1 - (1 + monthly_rate)^(-36))

target_36_month_payment = max(payment_36, starting_minimum_payment)

Extra-payment comparison

When Extra paid each month ($) is greater than 0, the same payoff loop runs again with the extra amount added to each monthly payment. Interest saved is the difference between the two interest totals.

extra_interest_saved = minimum_total_interest - extra_total_interest

Mini-example

Suppose Current balance ($) is $1,000, APR (percent) is 12, Minimum payment rule is Percent of balance, with a $ floor, Balance percent for minimum (percent) is 100, and Smallest minimum payment ($) is 0. The monthly rate is 0.01, so the first month's interest is $10. The balance before payment is $1,010, and the 100% minimum pays $1,010. The First minimum payment is $1,010, Time to pay off with minimum payments is 1 month, and Interest with minimum payments is $10.