How to use it
- Use the formula below with your own figures.
The formula
Minimum ≈ a small percent of the balance plus interest.
Worked example
Paying only the minimum can turn a small balance into years of debt.
Frequently asked questions
Why avoid minimums?
Most goes to interest, so balances barely fall.
What helps?
Any amount above the minimum shortens payoff sharply.
Tips
- Pay more than the minimum — it changes payoff dramatically.
- Attack the highest-rate balance first to save the most.
- Stop adding new charges while you pay debt down.
Key terms
- Minimum payment
- The smallest amount due each period.
- Utilization
- Balances divided by credit limits.
- Consolidation
- Combining debts into one loan.