# Minimum Payment Calculator

#### By Daniel Cohen • 1 minute read

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• Learn how long it takes to become debt free
• Discover how much interest you pay over time
• Compare how much you would save if you made fixed payments

## Calculate the True Cost of Paying the Minimum Payment

The calculator is temporarily undergoing an upgrade. Check back soon for the upgraded version.

Every credit card bill comes with a minimum payment, but what is the minimum payment and why do banks set a minimum payment? The minimum payment is the lowest amount you have to pay each month to keep you account in good standing. Banks and other credit issuers usually calculate this as a percentage of what you currently owe. Most banks typically require you to pay anywhere from 2% - 4% of your account balance.

If you owe \$10,000 for example, you only need to pay \$400 if you bank requires you to make a minimum payment of 4% of your debt amount. Because the minimum payment is calculated as a percentage of your outstanding debt, your minimum payment will actually decrease as you pay off your debt. This may sound like a great deal because you don’t have pay as much each month, but sticking to your bank’s minimum payment can be a costly mistake.

To see why paying the minimum amount is so costly, enter your credit card debt and your interest rate into the calculator above. Tell us the amount you can afford to pay and find out how much faster you will be debt free and how much interest you’d save by making the same payment every month.

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• LC
Leonard,
Mar, 2015

This is a great calculator. I didn't realize that by making fixed payments I could save so much money.

• Betsalel,
Mar, 2015

If you have high interest rates on your credit cards, then you might benefit by looking into a personal loan. Check out Bills.com personal loan rate table.

• TW
Tom,
Boston, MA,
Jun, 2012
What if I cannot afford my minimum payments? Do I have debt payment options, and will my creditors let me take time off from paying?
• BA
Bill,
Jun, 2012
Here are some options to consider if you cannot afford your minimum payments:
1. Contact your creditors, before you miss a payment, to see if they will put you in a temporary hardship program that could lower your interest rate and minimum payment. See if the relief they offer, if they choose to offer you any flexibility at all, is enough to help you weather a storm until you can resume making payments.
2. Look into credit counseling. If interest rates are a serious problem, credit counseling may help you.
3. Speak with a reputable debt settlement provider, one that will present you the pros and cons of debt settlement. Debt settlement should have the lowest monthly payment and greatly reduce your total costs to become debt free.

Make sure you can commit to the payment required in either credit counseling or debt settlement, before you commit to either one. The only way either program will succeed is if you can see it through to completion.

• DL
Davis,
Boston, MA,
Sep, 2011
Where is this Debt Coach tool you spoke of to Sam D?
• SD
Sam,
Apr, 2011
This minimum payment debt calculator is super helpful, but it would also be terrific if you could show me what the cost of my other options would be too.
• BA
Bill,
Apr, 2011
Hang in there a few more weeks Sam. Our engineers have been building an incredibly powerful tool that we are calling DebtCoach to help people just like you not only see the cost of minimum payments, but also to compare debt consolidation loans, debt resolution, credit counseling, optimized payments and all debt solutions! Great idea and we are working on it right now.
• RG
Roger,
Huntington Woods, MI,
Apr, 2011
This is scary. I have \$20,000 in debt and it will take me until 2047 to pay it off at \$400 a month. 14% doesn't seem that bad to me, but the amount of money I have to pay back is ridiculous. It's going to cost me \$47,100. If I can't afford more than \$400 a month, what other option do I have?