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 each month. 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)
• \( T \) — Time to pay off (months)

Explanation: The formula calculates how many months it will take to pay off the debt when making fixed minimum payments that include both principal and interest.

3. Importance of Minimum Payment Calculation

Details: Understanding minimum payment timelines 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 credit card balance, typical minimum payment amount (usually 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 calculated to be just above the monthly interest, so most of your payment goes toward interest rather than principal.

Q2: What if my minimum payment changes?
A: This calculator assumes fixed minimum payments. In reality, minimums decrease as your balance decreases, which would extend the payoff time.

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

Q4: Does this account for late fees or other charges?
A: No, this calculates only the basic interest and principal payments. Additional fees would extend payoff time.

Q5: What does "infinite" payoff time mean?
A: This occurs when your minimum payment doesn't cover the monthly interest, meaning your debt would grow rather than shrink over time.