Credit card interest compounds monthly on the remaining balance, and because rates are typically very high — often 18-29% APR — a payment that looks reasonable can still leave the balance barely shrinking, or in the worst case, growing.
The trap of paying only the minimum
Minimum payments on most cards are calculated as a small percentage of the balance — often 2-3% — which means the payment itself shrinks as the balance shrinks, dramatically extending the payoff timeline. A $5,000 balance at 22% APR paid at a fixed $100/month (2% of the original balance) can take well over 6 years to clear, and the total interest paid can exceed the original balance itself.
Why some payments never work
If your fixed monthly payment is less than or equal to the interest charged that month, the balance does not decrease at all — it grows, because unpaid interest gets added to the principal and starts accruing its own interest the following month. This calculator checks for that case directly: any payment below the current month’s interest charge is mathematically incapable of ever reaching zero, no matter how long you wait.
The outsized effect of paying a little more
Because interest compounds on the balance every month, small increases in the fixed payment produce disproportionately large reductions in total interest paid and payoff time — increasing a payment by 25% often cuts the payoff time by much more than 25%, since more of each new dollar reaches the principal rather than being consumed by growing interest. This is the single most effective lever most people have for reducing credit card debt cost, more so than negotiating a rate reduction, though both help.
What this does not model
This assumes no new purchases are added and the payment never changes, which is rarely how real credit card use works. Any new charge added to the balance resets the clock on that portion, and many people paying down a balance continue using the same card, which can undermine the entire payoff plan. If avoiding new charges is not realistic, a useful practical step is to physically separate the card being paid off from ongoing spending until the balance reaches zero.