The Minimum Payment Trap
Minimum payments seem safe, but they keep your balance alive for years. Here’s why, plus a few simple tweaks that save real money without a huge change to your budget.
Why Minimums Keep You Stuck
Credit cards charge interest on your average daily balance. When you only pay the minimum, most of that payment goes toward interest, not the actual debt.
The balance barely moves. The payoff takes years. The total cost climbs.
That’s the trap.
A quick example
Let’s say you owe $5,000 at 24% APR. Here’s the math behind it.
Monthly payment | $125 | $200 |
Pay off tim | ~82 months | ~35 months |
Total paid | ~$10,250 | ~$7,000 |
Interest | ~$5,250 | ~$2,000 |
Same card. Same rate. Just $75 more shaves almost 4 years off and saves about $3,250 in interest.
Smarter Habits
Pay early. Send your payment before the statement closes. A lower balance means less interest next cycle.
Go biweekly. Two smaller payments shrink your average balance.
Automate the minimum. Then add a small extra. Even $15 to $25 makes a dent.
Tackle high APR first. Keep others on autopay.
Avoid fees. Late, transfer, and annual fees all slow your progress.
10-Minute Money Check
List every card with balance, APR, and minimum.
Pick one extra amount you can stick with.
Schedule payments before the statement date.
Why this helps
You don’t need a perfect plan. You need one you’ll repeat. Small, steady moves crush debt faster than big promises.