Minimum Payment Trap Calculator

See the true cost of making only minimum payments — the most expensive way to carry debt.

Multi-segment balances · Promo APR tracking · Daily accrual (APR ÷ 365) · Configurable minimum rules

The Minimum Trap

Minimum payments are designed to keep you in debt longer. As your balance shrinks, so does your minimum, meaning you pay less each month and interest takes over.

Years, Not Months

A $5,000 balance at 19.99% APR with 2% minimums takes over 30 years to repay, costing more in interest than the original debt.

What This Shows

This calculator simulates exactly how minimum payments play out month by month, with segment-level interest tracking and promo APR cliff warnings.

Your Debts / Accounts
The month you're making your first minimum payment

When an account has multiple balance segments (e.g. a 0% promo + a regular balance), this rule controls which segment each payment dollar reduces first.

Lowest APR First: Payments retire your low-rate balances first, leaving the high-rate balance to keep accruing. This is how most Canadian issuers apply your payments.

Add your account(s) and click Calculate Minimum Payment Cost to see how long minimum payments will take, and how much they'll cost.

Understanding the Minimum Payment Trap

How long does it take to pay off a credit card with only minimum payments?

It can take many years, sometimes decades, to fully repay a balance using only minimum payments. For example, a $5,000 balance at 19.99% APR with a 2% minimum payment may take 20+ years to pay off, depending on how the minimum payment formula works and whether new purchases are added. This calculator simulates the full repayment timeline so you can see how minimum payments affect your total interest and payoff time.

Why do minimum payments keep credit card debt for so long?

Minimum payments are usually calculated as a small percentage of your balance, commonly around 2–3% of the outstanding amount. As your balance decreases, the minimum payment decreases as well. Because the payment becomes smaller over time, a large portion of each payment goes toward interest rather than reducing the principal balance. This structure can significantly extend the repayment timeline, which increases the total interest paid over the life of the debt.

Example: A $5,000 balance at 19.99% APR with a 2% minimum payment starts at about $100 per month. As the balance falls, the required payment also falls. Eventually you might be paying around $25–$30 per month on a $1,000 balance, and a large portion of that payment may still go toward interest.

Do minimum payments reduce the balance or only pay interest?

Minimum payments always cover interest first. Any remaining portion of the payment is applied to the principal balance.

When the minimum payment is small relative to the balance, most of the payment may go toward interest, especially during the early stages of repayment. This means the principal balance decreases slowly.

Over time, as the balance declines, a larger portion of each payment begins to reduce the principal. However, relying only on minimum payments can still lead to a very long repayment period and significantly higher total interest costs.

What are balance segments and why do they matter?

A single credit card can carry multiple balances at different interest rates simultaneously. Each portion of the balance is treated as a separate balance segment with its own APR and sometimes its own promotional expiry date.

The allocation rule determines which segment gets paid first. Credit card issuers follow specific payment allocation rules that determine which balance segment receives your payment first. In many cases, minimum payments are applied proportionally or toward lower-APR balances first, while amounts paid above the minimum are applied to the highest-APR balance. Because of these rules, higher-interest balances may remain outstanding longer than expected.

What happens when a promo rate expires?

When a 0% promotional APR expires, the remaining balance typically converts to the card’s regular APR. Some promotional offers use deferred interest, which means interest continues accumulating during the promo period but is only charged if the balance is not fully paid before the promotion ends. If that happens, all accumulated interest may be added to the balance at once. This calculator tracks promotional expiry dates and highlights when the conversion occurs in the amortization schedule.

How is interest calculated?

This calculator uses daily interest accrual, calculated as:Interest = Balance × (APR ÷ 365) × Number of Days. Each balance segment accrues interest independently using its own APR. This method closely reflects how most credit cards calculate interest in practice.