See how long it takes to pay off a credit card balance when making only minimum payments, and how much interest you will pay.
Rates as of Q2 2025 (example)
This calculator shows what happens when you pay only the minimum payment on a credit card balance — how many months (or years) it takes to pay off the balance, and how much total interest accumulates. Because the minimum payment is typically a small percentage of the outstanding balance, it decreases as the balance falls — meaning payoff takes far longer (and costs far more in interest) than most cardholders expect. This is in contrast to the Credit Card Payoff Calculator, which models a fixed monthly payment you choose.
Each month, interest is charged on the current balance at the card's monthly rate. The minimum payment is calculated as the higher of the percentage of the current balance or the floor amount. This payment covers the interest charge first, with the remainder reducing the principal. Because the minimum decreases as the balance falls, payoff takes dramatically longer than a fixed payment strategy.
Formula: Each month: Interest = Balance × (Annual Rate ÷ 12). Minimum Payment = max(Balance × Minimum %, Floor Amount). Balance = Balance + Interest − Minimum Payment. Repeat until Balance = 0. Total Interest = sum of all monthly interest charges.
Example: A A$5,000 balance at 20% interest (example rate — enter your actual rate), with a 2% minimum payment and a A$25 floor: paying only the minimum each month, it takes approximately 43 years and 8 months (524 months) to pay off the balance, with total interest of roughly A$20,209.99 — meaning you pay over A$25,000 in total to clear a A$5,000 debt. (Note: this example is for illustration purposes only — it assumes no new charges are added to the card.)
Credit cards remain widely held in Australia, with most major banks and financial institutions offering a range of products from basic low-rate cards to premium rewards and frequent flyer cards. The minimum payment trap demonstrated by this calculator is a significant driver of long-term credit card debt — many Australians carry a revolving balance on their card, paying only the minimum (or a little above) each month without realising how slowly the balance is being reduced. ASIC's MoneySmart website highlights minimum payment dangers and requires credit card statements to display a minimum payment warning, but the full magnitude of the time and interest cost is often not appreciated without a calculation like this one. If you carry a credit card balance, the Credit Card Payoff Calculator shows what happens when you commit to a fixed monthly payment instead — even increasing the payment from the minimum to a fixed A$200 or A$300 per month can cut decades off the payoff timeline and save thousands in interest. Balance transfer offers (temporarily moving a balance to a 0% or low-rate card) can help, but watch for balance transfer fees (usually 1-3% of the transferred amount) and the rate that applies after the promotional period — if the balance is not fully cleared during the promotional period, the remaining amount reverts to the card's standard rate.
Because the minimum payment is a percentage of the outstanding balance, it decreases every month as the balance falls. At first, a large portion of each minimum payment is consumed by interest, leaving only a small amount to reduce the principal. As the balance (and thus the minimum payment) shrinks, so does the portion of each payment that reduces principal — slowing payoff further. A fixed monthly payment avoids this trap by maintaining a consistent repayment amount, directing more and more to principal as interest charges decline.
Most Australian credit card minimum payments are the greater of a percentage of the closing balance (commonly 2-3%) or a flat floor amount (commonly A\$25 or A\$30). Some cards calculate the minimum as the percentage of the closing balance plus interest, or use different formulas — check your card's terms and conditions for the exact calculation, and use the matching inputs in this calculator.
Yes — this calculator models a static balance with no new purchases added. In reality, any new purchases add to the balance and extend the payoff timeline beyond what this calculator shows. If you are trying to pay off a credit card, the most effective approach is to stop making new purchases on the card during the payoff period — or switch to a different card for new spending.
Most Australian credit cards offer an interest-free period on new purchases (typically 44-55 days from the statement close date), but this only applies if you pay your full closing balance by the due date each month. If you carry a balance from month to month, interest is charged on new purchases from the date they are made — there is no interest-free period while you have an existing balance. This calculator applies this assumption: interest accrues on the full balance each month without an interest-free period.
The standard interest rate is set by the card issuer and is generally not individually negotiable, but you can sometimes call your card provider and request a rate reduction, particularly if you have a good repayment history and are a long-standing customer. Alternatively, switching to a low-rate credit card (some Australian low-rate cards offer rates of 8-13%) can significantly reduce the interest cost on any carried balance. ASIC's MoneySmart comparison tool lists current low-rate card offers.
This calculator models minimum payments — a declining percentage of the balance that results in very slow payoff and very high total interest. The Credit Card Payoff Calculator models a fixed monthly payment that you choose and maintain throughout the payoff period, which is the more effective (and faster) way to pay off credit card debt. Use this calculator to see the "do nothing extra" scenario, and the Credit Card Payoff Calculator to model a committed fixed payment.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. The interest rate and minimum payment percentage used are examples only and do not represent the terms of any specific credit card — actual rates, minimum payment formulas, fees, and conditions vary by card issuer and change periodically. This calculator assumes no new purchases are made and does not account for annual fees or other charges. Consult your card issuer's terms and conditions and consider speaking with a qualified financial counsellor if you are struggling with credit card debt.