Minimum Payment Trap Calculator
Paying the minimum? You could be in debt for — years and pay — extra.
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The Minimum Payment Trap
Minimum Payments
Fixed Payment
Interest vs Principal Over Time
💡 What This Means
Enter your balance to reveal the minimum payment trap in your situation.
Frequently Asked Questions
What is the minimum payment trap?
Banks set minimum payments at 2–5% of your balance so you stay in debt longer and pay more interest. On a ₹1 lakh balance at 36% APR, paying only 2% minimum means 15+ years of debt and ₹2+ lakh in interest charges.
How does minimum payment percentage affect payoff time?
As your balance decreases, your minimum payment (being a percentage of balance) also decreases — which means you pay less and less principal each month. This creates a geometric drag on debt elimination.
What fixed amount should I pay to escape the trap?
A good rule: pay at least 5–10% of your original balance every month as a fixed amount. For ₹1 lakh, that's ₹5,000–₹10,000/month. This cuts payoff time from 15 years to under 2 years.
Is it bad to only pay the minimum on credit cards?
Paying only the minimum avoids late fees but is one of the most expensive financial decisions you can make. It maximizes bank profits at your expense. Always pay more than the minimum whenever possible.