1. What is the MBNA Minimum Payment Calculator?

This calculator estimates how long it will take to pay off your MBNA credit card debt making only minimum payments, using Bankrate's methodology. It shows the impact of interest compounding when only minimum payments are made.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( P \) — Principal balance (GBP or CAD)
• \( MP \) — Minimum payment amount (GBP or CAD)
• \( R \) — Monthly interest rate (APR / 12)
• \( T \) — Time to pay off (months)

Explanation: The formula accounts for the compounding interest that accumulates when only minimum payments are made each month.

3. Importance of Minimum Payment Calculation

Details: Understanding how long it takes to pay off debt with minimum payments helps consumers make informed decisions about credit card usage and repayment strategies.

4. Using the Calculator

Tips: Enter your current credit card balance, the minimum payment percentage (typically 2.25% for MBNA cards), and your APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does it take so long to pay off with minimum payments?
A: Minimum payments are calculated to cover mostly interest with only a small portion going toward principal, resulting in long payoff periods.

Q2: What's a typical MBNA minimum payment percentage?
A: MBNA typically requires minimum payments of 2.25% of the balance or £5 (whichever is higher).

Q3: Why does the calculator sometimes show infinite time?
A: If your minimum payment is less than the monthly interest, your balance will grow indefinitely (negative amortization).

Q4: How accurate is this calculator?
A: It provides a good estimate but actual results may vary slightly due to rounding in real statements and potential rate changes.

Q5: How can I pay off my card faster?
A: Pay more than the minimum, make biweekly payments, or consider balance transfer options with lower interest rates.