The Real Cost of Minimum Payments
Making only the minimum payment on a credit card is one of the most expensive financial decisions you can make. On a $5,000 balance at 20% APR with a $100 minimum payment, it takes over 10 years to pay off and costs over $7,000 in interest — more than the original debt.
The Debt Avalanche Method
Pay the minimum on all cards, then put every extra dollar toward the card with the highest interest rate. This mathematically minimizes total interest paid.
The Debt Snowball Method
Ignore interest rates. Pay off the smallest balance first for psychological wins and momentum. Research shows this method leads to higher debt-free success rates despite being mathematically sub-optimal.
The Power of Adding Just $50 Extra
Adding just $50 extra to your monthly payment can often cut years off your payoff timeline and save hundreds or thousands in interest. Use this calculator to see your personalized impact.