The minimum payment trap
Minimum payments are typically set at 2 to 5% of the balance, deliberately close to the interest accruing. Paying only the minimum on a 5,000 balance at 36% can take well over a decade and cost more in interest than the original spending.
If your payment is below the monthly interest, the balance grows no matter how long you pay. This calculator flags that case explicitly rather than showing an impossible payoff date.
Getting out faster
Three levers work. Raise the payment, since every extra unit goes straight to principal once interest is covered. Lower the rate, by asking your issuer, moving to a balance-transfer offer, or consolidating into a personal loan at a much lower rate. Stop adding new charges, because you cannot outrun a balance you keep refilling.
Frequently asked questions
Why is credit card interest so high?
The debt is unsecured, meaning there is no asset the issuer can reclaim, and default rates are high. The rate prices that risk, plus the convenience of revolving credit.
What if my payment is below the monthly interest?
The balance will grow indefinitely and the debt can never clear. The calculator flags this. You must increase the payment or reduce the rate.
Is a balance transfer worth it?
Often yes if you can clear most of the balance during the promotional period. Factor in the transfer fee, typically 1 to 3%, and know the rate that applies afterwards.
Should I close the card after paying it off?
Not necessarily. Keeping it open with zero balance helps your credit utilisation ratio. Close it only if the annual fee is not worth it or the temptation is genuinely unmanageable.
Does paying twice a month help?
Slightly, on cards that calculate interest on average daily balance, because your balance is lower for part of the month. The bigger win is simply paying more overall.
Should I clear cards or build savings first?
At 30% plus, clearing card debt beats almost any savings return. Keep a small buffer of about one month of expenses, then attack the cards.