Escaping the Credit Card Trap
Credit card debt often carries high interest rates (APRs) of 20% or more. Paying only the minimum amount can keep you in debt for decades. This calculator allows you to see the light at the end of the tunnel by showing exactly how long it will take to be debt-free at your current payment level.
Why Minimum Payments Are a Trap
Minimum payments are typically calculated as a small percentage of your balance (often just 2–3%), which barely covers the interest charged that month. The result: a $5,000 balance paid at the minimum can take over 20 years to clear and cost more than double the original amount in interest.
A Worked Example
Take a $4,000 balance at 22% APR. Paying a fixed $200/month, the first month's interest is 4000 × (0.22/12) ≈ $73, so the balance becomes 4000 + 73 − 200 = $3,873. Repeating that cycle, the balance clears in roughly 23 months with about $598 in total interest. Pay only the ~$120 minimum instead, and the same balance takes over 4 years and costs more than $1,800 in interest.
Avalanche vs. Snowball
- Avalanche method: Pay off the highest-interest card first while making minimums on the rest. This saves the most money mathematically.
- Snowball method: Pay off the smallest balance first for quick psychological wins. It costs slightly more but keeps many people motivated.