Minimum payments feel affordable, but they're designed to keep you paying interest for as long as possible.
How minimums are set
A typical minimum is around 1%–3% of the balance plus that month's interest. Early on, that's barely above the interest itself, so the balance falls painfully slowly.
The real cost
On a $6,000 balance at 22% APR, paying only the minimum can take well over a decade and cost thousands in interest. Paying a fixed amount instead — and adding a little extra — can cut that to a couple of years.
What to do instead
Pay a fixed monthly amount higher than the minimum and keep it constant even as the minimum drops. See the difference in the calculator.
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