1. What is the Minimum Repayment Calculator?

This calculator estimates how long it will take to pay off credit card debt making only minimum payments, taking into account the interest charges that accrue each month.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( P \) — Principal balance (current debt amount)
• \( MP \) — Minimum payment amount
• \( R \) — Monthly interest rate (APR ÷ 12)
• \( T \) — Time to payoff in months

Explanation: The formula calculates how many months it would take to pay off the debt when each payment barely covers the interest plus a small amount of principal.

3. Importance of Minimum Payment Calculation

Details: Understanding how long minimum payments take helps consumers realize the true cost of carrying credit card debt and motivates paying more than the minimum.

4. Using the Calculator

Tips: Enter your current balance, typical minimum payment (usually 1-3% of balance), and your card's APR. The calculator will show how long payoff would take with just minimum payments.

5. Frequently Asked Questions (FAQ)

Q1: Why does it take so long to pay off with minimum payments?
A: Minimum payments are designed to be small (often just 1-3% of balance) and mostly cover interest, leaving little to reduce principal.

Q2: What if my minimum payment changes?
A: This assumes fixed minimum payments. In reality, as your balance decreases, minimum payments decrease slightly, extending payoff time.

Q3: How can I pay off my card faster?
A: Pay more than the minimum, even small additional amounts can significantly reduce payoff time and total interest paid.

Q4: What if I see "debt will never be paid off"?
A: This means your minimum payment doesn't cover the monthly interest, so your balance would actually grow over time.

Q5: Does this account for late fees or other charges?
A: No, this calculates ideal scenario with only interest and your specified minimum payments.