1. What is the Minimum Payment Calculator?

This calculator estimates how long it will take to pay off credit card debt making only minimum payments. It shows the impact of interest on debt repayment.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( P \) — Principal balance ($)
• \( MP \) — Minimum payment ($)
• \( R \) — Monthly interest rate (APR/12 as decimal)
• \( T \) — Time to pay off (months)

Explanation: The formula accounts for compound interest and calculates how many months it takes for minimum payments to cover both principal and interest.

3. Importance of Minimum Payment Calculation

Details: Understanding minimum payment timelines helps consumers realize how long debt lasts and the benefits of paying more than minimum.

4. Using the Calculator

Tips: Enter your current balance, typical minimum payment (often 2-3% of balance), and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does paying minimum take so long?
A: Minimum payments are designed to mostly cover interest, paying down principal very slowly.

Q2: What's a typical minimum payment?
A: Usually 1-3% of balance or $25-35 (whichever is higher), but check your card terms.

Q3: How can I pay off debt faster?
A: Pay more than minimum, reduce spending, or transfer to lower-interest cards/loans.

Q4: Does this include fees?
A: No, this calculates interest only. Late fees or other charges would extend payoff time.

Q5: What if my minimum payment changes?
A: This assumes fixed minimum payments. Actual time may vary if payments adjust with balance.