How is the minimum payment on a credit card calculated?

Almost always as the greater of two things: a flat dollar floor, or a share of what you owe — commonly 1% to 3% of the balance, often with that month’s interest added on top. Your cardholder agreement states which. The two parts behave very differently: the share shrinks as you repay, the floor does not, and it is the floor that eventually clears the debt.

Why does paying the minimum take so long?

Because the payment falls as fast as the balance does. On the example above, the first minimum is $142.29 — of which $92.29, or 65%, is interest. Only $50.00 comes off the debt, and next month the required payment is smaller still. The result is 19 years and 3 months and $8,158.74 of interest on a $5,000 balance.

What is the three-year figure on my statement?

It is required by federal law. Since the CARD Act of 2009, 15 U.S.C. § 1637(b)(11) obliges card issuers to print, on every statement, how long the balance will take at the minimum, what that costs, and the monthly payment that would clear it in 36 months. This page computes the same four figures, so you can check them against the box on your own statement.

My statement does not show a three-year payment. Is that a mistake?

Probably not. Regulation Z (12 CFR 1026.7(b)(12)) waives that part when repaying at the minimum would already take three years or less — and also for charge cards paid in full each cycle, and for cycles where the minimum clears the whole balance. This calculator applies the same rule, so it hides the figure exactly when a statement would.

Why does the calculator sometimes answer “never”?

Because that is the honest answer. If the minimum is only a percentage of the balance with no dollar floor, it repays a constant fraction of the principal each month: the balance follows a geometric decline and approaches zero without reaching it. And if the payment does not even cover the month’s interest, the balance grows. In both cases there is no payoff date to give, so the page does not invent one.

What interest rate should I enter?

The APR printed on your statement, which is the only one that applies to you. The default here is 22.15% — the average the Federal Reserve reports for accounts actually assessed interest in the second quarter of 2026. The wider average across all accounts is lower, 20.94%, but it includes cards cleared in full every month, which are not the cards people are trying to pay off.

Does the calculator assume I stop using the card?

Yes, and so does the disclosure on your statement: appendix M1 to 12 CFR part 1026 specifies that the estimate assumes no further purchases, a constant rate, and that only the minimum is paid. Any spending you add pushes the payoff date out beyond what either figure shows.

Money

Credit Card Payoff Calculator

How long the minimum really takes, what it costs, and the three-year payment your statement is required to show you.

What your statement is required to tell you

Since the CARD Act of 2009, every US card statement must carry a Minimum Payment Warning: how long the balance takes at the minimum, what that costs, and the payment that would clear it in three years. These are those figures, computed for the balance above. They should match the box on your statement.

Minimum Payment Warning

Making only the minimum payment will increase the amount of interest you pay and the time it takes to repay your balance.

If you make only the minimum payment: 19 years and 3 months; and you will have paid $13,158.74 in total.
If you pay it off in 3 years: $191.35 a month; for a total of $6,888.12 — a saving of $6,270.62.

Required by 15 U.S.C. § 1637(b)(11), with the method set out in appendix M1 to 12 CFR part 1026. That appendix lets an issuer be two months out on the repayment estimate and 10% out on the three-year payment. We do not use that latitude: the payment above clears the balance in exactly 36 months, checked by replaying it through the same engine.

The same debt, on two schedules

The gap between the two lines is what the extra $49.06 a month buys you.

Scale tops out at $5,000

Month 1Month 231

Paying the minimumClearing it in three yearsMonth 36

Why the minimum barely moves the balance

A minimum set as a share of the balance shrinks as the balance does. Pay 1% of what you owe and you retire 1% of the principal — this month, and every month after. The remaining balance follows a geometric decline: it approaches zero without ever arriving.

What actually ends the debt is the dollar floor. It does not shrink, so sooner or later it overtakes the percentage and starts repaying real principal. On this balance that happens at month 175 — for the 174 months before it, the $25 floor is doing nothing at all, and for the 57 after it, the floor is doing everything.

Set the floor to $0 above and the calculator will refuse to answer — correctly, because with no floor there is no answer to give.

What a fixed payment does instead

The minimum falls as you repay, which is why it lasts so long. A fixed amount does not, and the difference is not gradual.

Fixed monthly payments, with the time and the interest each one leads to
Pay each month	Cleared in	Interest	Against the minimum
$50	never	—	never clears it
$100	11 years and 9 months	$9,012	saves $-854
$150	4 years and 5 months	$2,834	saves $5,324
$200	2 years and 10 months	$1,768	saves $6,391
$300	1 year and 9 months	$1,031	saves $7,128
$500	1 year	$579	saves $7,580

A payment that does not cover the interest charged that month leaves the balance higher than it found it. That row says never because that is what happens, not because the calculation failed.

Year by year, at the minimum

231 payments, the first of which is $142.29 — of which $92.29 is interest.

Each year at the minimum payment, with interest, principal and remaining balance
Year	Interest	Principal	Balance	Paid off
1	$1,049	$568	$4,432	11% repaid
2	$929	$504	$3,928	21% repaid
3	$824	$446	$3,482	30% repaid
4	$730	$396	$3,086	38% repaid
5	$647	$351	$2,736	45% repaid
6	$574	$311	$2,425	52% repaid
7	$509	$276	$2,149	57% repaid
8	$451	$244	$1,905	62% repaid
9	$400	$216	$1,689	66% repaid
10	$354	$192	$1,497	70% repaid
11	$314	$170	$1,327	73% repaid
12	$278	$151	$1,176	76% repaid
13	$247	$134	$1,042	79% repaid
14	$219	$118	$924	82% repaid
15From month 175 the percentage has fallen below the $25 floor, so the floor is what repays the rest.	$194	$110	$814	84% repaid
16	$167	$133	$681	86% repaid
17	$135	$165	$516	90% repaid
18	$94	$206	$310	94% repaid
19	$44	$256	$54	99% repaid
20	$2	$54	$0	100% repaid

The formula

monthly rate r = APR ÷ 100 ÷ 12

interest this month = balance × r

minimum due = max(dollar floor, balance × share ÷ 100 [+ interest this month])

balance next month = balance + interest − payment

three-year payment = balance × r ÷ (1 − (1 + r)^−36)

The bracketed term applies to the common “share of the balance plus this month’s interest” form. The important detail is the max: two rules compete every month, and which one wins changes over the life of the debt.

Worked example

$5,000 at 22.15%, with a minimum of 1% of the balance plus interest and a $25 floor.

first minimum = max($25, 5,000 × 1% + $92.29) = $142.29
of which $92.29 is interest — 64.86% of the payment
paying only the minimum: 231 months (19 years and 3 months), $13,158.74 paid in all
interest alone comes to $8,158.74
clearing it in 36 months costs $191.35 a month, or $6,888.12 in all — a saving of $6,270.62

The gap is worth reading twice. Paying $49.06 a month more than the first minimum turns 19 years and 3 months into three years and saves $6,270.62 — more than the $5,000 that was borrowed in the first place.

The floor is what ends the debt, not the percentage

A minimum set as a share of the balance retires that same share of the principal every month. The balance is then a geometric sequence — it falls by a constant proportion, so it approaches zero without ever arriving. On its own, a percentage minimum describes a debt with no end.

What ends it is the dollar floor, because a fixed amount does not shrink. On the example above, the percentage stays above the $25 floor for the first 174 months. From month 175 onward the floor takes over and does the remaining 57 months of work.

Which is why advice to “just pay a fixed amount instead” is right for a reason rarely given: a fixed payment is not merely larger, it is a different kind of number. It is the only part of a minimum payment that was ever going to clear the card.

Where this goes wrong

Reading the minimum as a repayment plan

The minimum payment is not a schedule, it is a threshold — the least you can pay without being in default. Nothing about it is designed to clear the balance, and its shape proves it: because it is a share of what you owe, it falls every month, so the repayment slows down precisely as the balance shrinks. Treating it as a plan is how a purchase becomes a debt measured in decades. The number to look at is not the minimum but the one your statement prints beside it — the payment that clears the card in three years.

Questions

How is the minimum payment on a credit card calculated?: Almost always as the greater of two things: a flat dollar floor, or a share of what you owe — commonly 1% to 3% of the balance, often with that month’s interest added on top. Your cardholder agreement states which. The two parts behave very differently: the share shrinks as you repay, the floor does not, and it is the floor that eventually clears the debt.
Why does paying the minimum take so long?: Because the payment falls as fast as the balance does. On the example above, the first minimum is $142.29 — of which $92.29, or 65%, is interest. Only $50.00 comes off the debt, and next month the required payment is smaller still. The result is 19 years and 3 months and $8,158.74 of interest on a $5,000 balance.
What is the three-year figure on my statement?: It is required by federal law. Since the CARD Act of 2009, 15 U.S.C. § 1637(b)(11) obliges card issuers to print, on every statement, how long the balance will take at the minimum, what that costs, and the monthly payment that would clear it in 36 months. This page computes the same four figures, so you can check them against the box on your own statement.
My statement does not show a three-year payment. Is that a mistake?: Probably not. Regulation Z (12 CFR 1026.7(b)(12)) waives that part when repaying at the minimum would already take three years or less — and also for charge cards paid in full each cycle, and for cycles where the minimum clears the whole balance. This calculator applies the same rule, so it hides the figure exactly when a statement would.
Why does the calculator sometimes answer “never”?: Because that is the honest answer. If the minimum is only a percentage of the balance with no dollar floor, it repays a constant fraction of the principal each month: the balance follows a geometric decline and approaches zero without reaching it. And if the payment does not even cover the month’s interest, the balance grows. In both cases there is no payoff date to give, so the page does not invent one.
What interest rate should I enter?: The APR printed on your statement, which is the only one that applies to you. The default here is 22.15% — the average the Federal Reserve reports for accounts actually assessed interest in the second quarter of 2026. The wider average across all accounts is lower, 20.94%, but it includes cards cleared in full every month, which are not the cards people are trying to pay off.
Does the calculator assume I stop using the card?: Yes, and so does the disclosure on your statement: appendix M1 to 12 CFR part 1026 specifies that the estimate assumes no further purchases, a constant rate, and that only the minimum is paid. Any spending you add pushes the payoff date out beyond what either figure shows.