Calculators / Credit-Card Minimum Payment Trap
Credit-Card Minimum Payment Trap
"How much money and time do I waste paying only the minimum?"
Consumption debt is the radioactive material of personal finance — debt taken on to buy things that lose value immediately, generate zero income, and have no resale value.
— Debugging Your Personal Finance, Chapter 6
Minimum payment: —, total interest —
Aggressive payment: —, total interest —
Money saved by paying aggressively: —
"Minimum payment" here means the larger of (interest plus the percent-of-principal you set) and the dollar floor. Most cards use a floor of about $15 to $35, which is what finally clears the card. With a $15 floor, 1% of principal and a 22% APR, $5,000 takes about 281 months (23.4 years) and roughly $8,500 in interest.
From Chapter 6 of Debugging Your Personal Finance. Simple calculator · Inputs stay in your browser · Not financial advice.
A simplified calculator for education, not financial advice. See the disclaimer.