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The minimum is designed to be paid forever.
A minimum payment is a slice of what you owe, so it shrinks as the balance does — which is why the end never arrives. On $5,000.00 at about 18%, paying only the minimum takes 354 months and costs $11,689 $11,688.80 in interest — more than twice what you borrowed. Add $40.00 a month and it ends about 15 years sooner.
A percentage-of-balance minimum with a dollar floor produces a declining payment against a compounding balance, so the amortization term is far longer than intuition suggests and is highly sensitive to the rate. At about 18% the term is 354 months; ⚠️ above roughly the point where the monthly rate meets the minimum percentage the balance does not amortize at all, which is the case in 2 of the worked examples below.Compounding is monthly and fees are excluded.
Paying the minimum
29 years, 6 monthsAdding $40 a month clears it in 14 years, 7 months instead of 29 years, 6 months — 179 months sooner, and $3,939 less interest.
The minimum-payment rule is set by your card issuer, not by law, so the percentage and floor above are yours to change — your statement has the real ones. Interest is charged monthly at the rate you entered. Fees, promotional rates and new purchases are not modeled.
The same balance, at different rates and rules
Every row is the same $5,000.00. Only the rate and the minimum rule change. Where it says never, the payment is not big enough to outrun the interest, so the balance simply stays.
Worked examples at a $25 floor. ⚠️ Where the term is "never", the interest column covers 100 years of payments rather than a payoff — the horizon is a cap, not a result.
| APR | Minimum | Time to clear | Interest |
|---|---|---|---|
| about 14.99% | about 2% | 257 | $6,760 |
| about 14.99% | about 3% | 143 | $3,161 |
| about 18% | about 2% | 354 | $11,689 |
| about 18% | about 3% | 162 | $4,375 |
| about 21.99% | about 2% | 814 | $35,802 |
| about 21.99% | about 3% | 198 | $6,711 |
| about 24% | about 2% | never | $95,317 |
| about 24% | about 3% | 224 | $8,414 |
| about 29.99% | about 2% | never | $5,998,248 |
| about 29.99% | about 3% | 383 | $19,056 |
What it adds up to
A $75,000 Texas salary
| Cash paid | $4,800 |
|---|---|
| Hours of work | 4.7 work weeks |
| A year | $480 |
| Growth given up | $1,527 |
Today’s price held constant; no price rises assumed.
If the money stayed put
A $75,000 Texas salary
| Spent today | $1,200 |
|---|---|
| Growth given up | $949 |
| Pay needed to buy it | $1,706 |
Assumes a 6% annual return that you can edit.
Minimum-payment rules are set by card issuers, not by statute, so the percentages above are worked examples rather than any company's terms — your statement has yours. Interest is charged monthly on the balance including that month's interest. Fees, promotional rates and new purchases are not modeled. Change the payment and rate above to match your statement.