1. What is the Minimum Payment Calculator?

The Minimum Payment Calculator estimates how long it will take to pay off credit card debt making only the minimum payments, based on your principal balance, minimum payment amount, and annual percentage rate (APR).

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

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

Explanation: The formula calculates how many months it would take to pay off the debt making only minimum payments, accounting for compound interest.

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 use and debt repayment strategies.

4. Using the Calculator

Tips: Enter your current credit card balance, your minimum payment amount (typically 1-3% of balance), and your card's 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 designed to be small (often just covering interest plus 1% of principal), which means most of your debt remains for many years.

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

Q3: How can I pay off my debt faster?
A: Pay more than the minimum whenever possible. Even small additional amounts can significantly reduce payoff time.

Q4: Does this calculator account for changing APRs?
A: No, it assumes your APR remains constant. Variable rate cards may take longer or shorter to pay off.

Q5: What if I make additional charges?
A: This calculator assumes no additional charges. Adding new purchases will extend your payoff time.