Why minimum payments take so long
Minimum payments are often set close to the monthly interest plus a small part of the balance. Most of your money goes to interest, so the balance barely moves. A $5,000 balance at 22% APR takes about 34 months to clear at $200 a month and costs roughly $1,750 in interest.
Two popular payoff methods
- Avalanche: pay extra on the card with the highest APR first. This costs the least interest.
- Snowball: pay extra on the smallest balance first. Quick wins can help you stay motivated.
With either method, keep making at least the minimum payment on every card.
Frequently asked questions
Does a balance transfer help?
A 0% intro APR transfer can save a lot of interest if you pay the balance off before the promotion ends. Transfer fees usually apply, so add the fee to the balance when you compare.
What if my payment is less than the interest?
Then the balance grows every month. The calculator will warn you and show the minimum amount needed just to cover interest.