The minimum
payment trap
A minimum payment is designed to keep the account current, not to pay it off quickly. At a high APR, most of the payment is interest.
A simple example
An $8,000 balance at 24% APR has about $160 of interest in the first month. A 2% minimum payment is $160. If the whole payment goes to interest, the balance does not fall at all.
Why the minimum changes
Minimums are often 1%–3% of the balance plus interest, with a floor. As the balance falls, the minimum falls too, which stretches the payoff further. That is the trap: the payment shrinks with the balance.
What to do instead
Pick a fixed payment above the minimum and automate it. Even $50–$100 extra per month goes to principal and shortens the payoff. Then avoid new charges while the balance is being paid down.
Check the math
Use the credit card payoff calculator to compare the minimum, a fixed payment, and a fixed payment plus extra. The difference in months and interest is usually larger than people expect.
FAQ
Is the minimum always bad?
It protects your credit if cash is tight, but it is a poor long-term payoff strategy.
Should I pay the smallest balance first?
That is the snowball method; it can help motivation. Avalanche targets the highest APR and usually saves more interest.
Run a payoff estimate Snowball vs avalanche
Estimate only; not financial advice.