1. What is the Minimum Repayment Calculator?

This 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 charges on repayment time.

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 takes for the balance to reach zero when making fixed minimum payments that cover at least the interest charges.

3. Importance of Understanding Minimum Payments

Details: Making only minimum payments can extend repayment for many years and significantly increase total interest paid. This calculator helps visualize the long-term cost.

4. Using the Calculator

Tips: Enter your current credit card balance, typical minimum payment amount (usually 2-3% of balance), and your card's annual interest rate (APR).

5. Frequently Asked Questions (FAQ)

Q1: Why does it take so long to pay off with minimum payments?
A: Minimum payments are designed to mostly cover interest charges, paying down very little principal each month.

Q2: What if my minimum payment changes?
A: This assumes fixed minimum payments. If your payment is percentage-based, the time may be longer as payments decrease with balance.

Q3: How can I pay off my debt faster?
A: Paying even slightly more than the minimum each month can dramatically reduce repayment time and interest costs.

Q4: Does this include fees or other charges?
A: No, this calculation only considers interest charges. Late fees or other penalties would extend repayment further.

Q5: What if I can't make the minimum payment?
A: Contact your credit card company immediately to discuss options, as missed payments hurt your credit score.