Credit Card Minimum Payment Math: Formulas, Payoff Times & APR Tables (2026 Reference)
Every issuer minimum follows one of two formulas. This reference works through both, with month-by-month simulated payoff times at every common APR — the numbers behind the warning box on your statement.
The Two Minimum Payment Formulas Issuers Use
Nearly every U.S. card issuer computes your minimum payment one of two ways: a flat percentage of the statement balance (typically 1–3%, most commonly around 2%) or accrued interest and fees plus 1% of the balance — each with a dollar floor, usually $25–$40. The structural difference matters enormously: the flat-percentage formula can leave almost nothing for principal at high APRs, while the interest-plus-1% formula guarantees the balance shrinks by 1% a month. Both are simulated in full below and in our credit card payoff calculator.
Your cardholder agreement states which formula applies; the phrase to look for is either "2% of the New Balance" or "1% of the New Balance plus interest and fees". Under the CARD Act, every statement must also carry a minimum payment warning disclosing how long minimum-only payoff takes and a 36-month comparison payment — the disclosure requirement is described in the CFPB's minimum payment warning explainer.
Simulated Payoff Tables: $5,000 on Minimums Only
The tables below simulate a $5,000 balance month by month under each formula (with a $25 floor and no new charges) at every common APR. This is the exact arithmetic behind the statement warning box.
Formula A — 2% of balance:
| APR | First minimum | Time to pay off | Total interest |
|---|---|---|---|
| 15% | ~$101 | 21 yr 6 mo | $6,772 |
| 18% | ~$102 | 29 yr 6 mo | $11,689 |
| 20% | ~$102 | 40 yr 6 mo | $18,500 |
| 22% | ~$102 | 68 yr 1 mo | $35,958 |
| 24% | ~$102 | over 300 yr | $192,464 |
Formula B — interest + 1% of balance:
| APR | First minimum | Time to pay off | Total interest |
|---|---|---|---|
| 15% | ~$113 | 17 yr 11 mo | $5,382 |
| 18% | ~$125 | 18 yr 6 mo | $6,539 |
| 20% | ~$133 | 18 yr 10 mo | $7,317 |
| 22% | ~$142 | 19 yr 2 mo | $8,100 |
| 24% | ~$150 | 19 yr 6 mo | $8,887 |
Under the most common formula, a $5,000 balance at today's typical 20%+ APRs takes 40 to 68+ years to clear on minimums, with total interest of 3.7× to 7× the original balance. Under the more borrower-friendly interest-plus-1% formula it still takes about 19 years. Either way, the escape is identical: fix your payment at the first minimum and never let it decline — that single change collapses the timeline to roughly 5-6 years with no extra outlay in month one.
Run your own balance, APR, and minimum percentage — or switch to a fixed payment or target date and watch the curves separate.
Simulate your balanceMethodology & How to Cite This Page
All payoff times and interest totals on this page are computed by month-by-month simulation: each month accrues interest at APR ÷ 12 on the current balance, applies the stated minimum formula with a $25 floor, and repeats until the balance reaches zero. No new purchases, fees, or rate changes are assumed. The same simulation engine powers our credit card payoff calculator, so every figure here is reproducible on the tool. APR context reflects Federal Reserve G.19 data showing average assessed card rates above 20% since 2023. Figures last recomputed July 2026; this page is updated when average rates or common issuer formulas change.
Writers and educators are welcome to cite these tables with a link to this page. For the underlying regulatory framework: minimum payment warnings and the 36-month disclosure are CARD Act requirements implemented in Regulation Z; the CFPB maintains the consumer-facing explanations linked below, and current average card APRs are published in the Federal Reserve's G.19 release.
- 1What is a minimum payment warning? — Consumer Financial Protection Bureau
- 2What is a minimum payment on a credit card? — Consumer Financial Protection Bureau
- 3Consumer Credit — G.19 (average card interest rates) — Federal Reserve
- 4Regulation Z (Truth in Lending) — Consumer Financial Protection Bureau
Calculators for this guide
Run your own numbers — every tool is free, private, and works offline.
Frequently asked questions
We are a research-first finance team. We do not sell leads, we do not rank lenders, and we have no affiliates pulling our recommendations. Every guide is built by pairing primary sources — the IRS, CFPB, Federal Reserve, Freddie Mac, Statistics Canada, OSFI — with the same calculators you can run yourself.
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