Minimum Due Calculator

The minimum due on a credit card statement is designed to look small. It keeps your account in good standing, but it also keeps you in debt, because most of the minimum goes to interest and very little to the balance. A card that you pay down at the minimum can take decades to clear and cost a multiple of what you spent. This calculator makes that visible with the numbers of your own card.

How the minimum is defined

Cards define the minimum in two common ways. One is a percentage of the outstanding balance, such as 5 percent, with a minimum amount below which it never falls. The other is a small percentage of the balance, such as 1 percent, plus the interest charged that month, which means the principal part is small but the payment always covers the interest. The select box lets you choose the rule your card uses. Because the amount falls as the balance falls, the schedule is very long.

A worked example

The default card has a balance of 1,00,000 at 42% a year, a minimum of 5% of the balance with a floor of 200, and a comparison payment of 10,000 a month. The first minimum is 5,175. Paying only the minimum clears the card in 226 months, 18 years 10 months, with 2,03,573 of interest, so you pay 3,03,573 in total, 3.04 times the balance. The balance at the end of year one is still 81,652, after two years 66,671, and it reaches 1,576 in year 18. A fixed payment of 10,000 clears the same card in 1 year 1 month, with only 25,265 of interest, a saving of 1,78,308.

Percent of balance or percent plus interest

With the percentage-plus-interest rule, a US-style card of 5,000 at 24% and a minimum of 1% plus interest, with a floor of 35, starts at 150 a month, takes 201 months (16 years 9 months) and costs 8,442 in interest, a total of 13,442 or 2.69 times the balance. Paying a fixed 250 clears it in 2 years 2 months with 1,449 of interest, saving 6,992. The difference between the two rules is that the second always covers the interest, so the balance does fall.

The fixed payment

The comparison box shows what happens if you decide on a payment and keep to it. A payment that stays the same as the balance falls clears the debt much faster than a shrinking minimum, because the principal part grows each month. Even a payment slightly above the first minimum makes a big difference. If your fixed payment does not cover the interest in the first month, the page says so and shows that the card is never cleared.

Edge cases

The balance must be above zero. A rate of zero is allowed and charges no interest, though a small percentage minimum then still takes a long time. The floor ensures the last payments do not fall to tiny amounts. When the balance gets very small, the final payment is the remaining amount. A comparison payment of zero or blank skips the comparison.

Limits

New purchases, cash advances, penalty rates and late fees are not included, any of which would lengthen the payoff. Real cards may also change the rate. The page assumes interest is charged monthly on the full balance, which matches most cards but not those with grace periods.

Related tools

• Debt Payoff Calculator plans repayment when you have several debts at once.
• Credit Utilization Calculator shows how a high card balance affects a ratio lenders watch.
• No-Cost EMI Calculator analyses another way of paying that hides its cost.
• DTI Calculator shows how card minimums feed into your debt-to-income ratio.