Escaping the Credit Card Minimum Payment Trap

Credit cards carry some of the highest interest rates (APRs) of any financial product on the market. If you carry a balance month-to-month, you are actively losing wealth. The tool above calculates standard amortization to show you the brutal reality of credit card debt.

Why Minimum Payments are Dangerous

Credit card companies set minimum payments extremely low (often just 2% of the balance or $35). They do this deliberately to stretch out your repayment timeline. If you only pay the minimum, the majority of your payment goes entirely toward interest, allowing the bank to profit massively while your actual balance barely shrinks.