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. It considers your principal balance, minimum payment amount, and annual percentage rate (APR).

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 calculates how many months it would take to pay off the debt when making minimum payments that exceed the monthly interest charges.

3. Importance of Minimum Payment Calculation

Details: Understanding the true cost of minimum payments helps consumers make informed decisions about credit card debt and motivates faster repayment strategies.

4. Using the Calculator

Tips: Enter your current credit card balance, typical minimum payment amount (or percentage of balance), and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does it say "Never" for some calculations?
A: If your minimum payment is less than the monthly interest, your balance will grow rather than shrink, making it impossible to pay off with minimum payments alone.

Q2: How accurate is this calculator?
A: It provides a mathematical estimate assuming fixed APR and consistent minimum payments. Actual results may vary with changing rates/payments.

Q3: What's a typical minimum payment?
A: Most cards require 1-3% of the balance or $25-35 (whichever is greater). Check your card terms for exact amounts.

Q4: How can I pay off my card faster?
A: Pay more than the minimum, make biweekly payments, or transfer to a lower-interest card. Even small increases in payment can significantly reduce payoff time.

Q5: Does this account for late fees or other charges?
A: No, this calculates only the interest and principal repayment. Additional fees would extend the payoff time.