Financial Warning Module

Minimum Payment Trap.

Discover the shocking truth of how long it takes to clear debt by only paying the minimum. Designed for awareness in Tier 1 credit markets.

"Banks and issuers in the USA and UK often set the minimum at Interest + 1% of Principal or a flat $25-$35. This ensures you stay in debt for the longest possible time."

Freedom Year
0.0 Yrs
Next Minimum Payment$0
Total Interest to Pay$0

Beat the Cycle

Adding just $50 extra to your minimum payment could save you over 10 years and $8,000 in interest.

Debt Payoff Strategist

The Minimum Payment Trap: Why You Aren't Paying Down Debt

"The minimum payment is a mathematical trick designed to keep you profitable for the bank while providing the illusion of progress."

How Minimums are Calculated

In the USA, UK, and Canada, credit card issuers generally calculate the minimum monthly payment as the higher of two values: **$25 to $35**, or **1% to 3%** of your total balance plus interest. Because the payment is tied to your balance, it decreases as your debt decreases, which slows down the payoff exponentially.

The Cost of Minimum Payments

On a $5,000 balance at 24% APR, a 2% minimum payment results in a payoff time of over **25 Years** and nearly **$12,000 in interest**.

Payment: Min Only
Time: 25+ Yrs
Payment: +$50
Time: 6 Yrs
Payment: +$100
Time: 4 Yrs
Interest Saved: $8k+

Credit Card Minimum FAQ

Is it bad to ONLY pay the minimum?

Unless you have a 0% APR promo card, yes. You are effectively only paying the interest, barely touch the principal, and your debt continues to compound.

What should I do if I can't pay more?

Call your issuer and ask for a 'Hardship Program' or consider a debt consolidation personal loan which usually has a lower fixed APR and a clear end date.