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What Banks Hide

How much is your credit card really costing you?

See how minimum payments turn a $5,000 balance into $13,000+ over decades. The math credit card companies hope you never do.

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Your Credit Card

Average credit card APR is ~22%

Minimum Payment Rules

3% of balance
Most cards: $25-$35 minimum

Extra Payments

Even $50/mo makes a huge difference

The True Cost

Your $5,000 balance will cost

$12,014

That's $7,014 in interest alone

17.1

Years to pay off

$7,014

Total interest

1.4x

Interest multiple

Where Your Money Goes Each Year

Most of your early payments go straight to the bank as interest.

Interest (bank profit)
Principal (your debt)

The minimum payment trap: Credit card companies set minimums low (3% of balance) because it maximizes their profit. On a $5,000 balance, you'll pay $7,014 in interest over 17 years. Even an extra $50/month could save you thousands.

What to Do Next

1

Try adding $50, $100, or $200 above in "Extra Payments" and see how dramatically the numbers change.

2

Build a full payoff plan - add all your debts and find the fastest path to zero.

3

Share this with someone who only pays the minimum - the numbers speak for themselves.

Minimum Payment Trap Calculator
whatbankshide.com
Total Cost: $12,014
Original balance$5,000
Total interest$7,014
Time to pay off17yr 1mo
Interest multiple1.4x
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How It Works

Enter your credit card balance, APR, and minimum payment rules. The calculator simulates every single monthly payment until the balance hits zero - the same math your credit card company uses, laid bare.

The shocking total: Your hero number shows the total amount you'll pay over the life of the debt. On a typical $5,000 balance, minimum payments can cost you $13,000+ total - more than 2.5x what you originally owed.

Interest vs. principal chart: The stacked area chart shows where your money goes each year. In the early years, most of your payment is interest (red) with very little going to principal (teal). This is by design - it's how credit card companies maximize profit.

Extra payments: Add even a small extra monthly payment and watch the numbers transform. The interest multiple drops, the timeline shrinks, and you can see exactly how much each extra dollar saves you.

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Frequently Asked Questions

What happens if I only make minimum payments on my credit card?
On a $5,000 balance at 22% APR with 3% minimum payments, you'll pay over $8,000 in interest and take more than 17 years to pay it off. In the early years, the vast majority of your minimum payment goes straight to interest - the bank's profit - while barely touching your actual balance. The lower your minimum payment percentage, the worse it gets.
Why do credit card companies set minimum payments so low?
Low minimums (typically 1-3% of your balance) are designed to feel affordable while maximizing the total interest you pay. A 2% minimum on a $5,000 balance is just $100/month - easy to manage - but it means you'll be paying for decades. Credit card companies make more money the longer you carry a balance. The minimum payment is the amount that keeps you in debt the longest without defaulting.
How much should I pay above the minimum on my credit card?
Even $50 extra per month makes a dramatic difference, often cutting your payoff time from decades down to just a few years and saving thousands in interest. Use the Extra Payments input above to see the exact impact. A good rule of thumb: pay at least double the minimum, or better yet, set a fixed monthly payment that's as high as your budget allows.
Is it better to pay off the highest interest card first?
Yes - the avalanche method (paying off the highest interest rate first) saves the most money mathematically. If you have multiple debts, use our Debt Payoff Strategies tool at /tools/debt-payoff-strategies/ to compare the avalanche method against the snowball method and find the fastest path to zero.
How long does it take to pay off $10,000 in credit card debt?
With only minimum payments (3% of balance, $25 floor) at a typical 22% APR, paying off $10,000 takes over 20 years and costs more than $16,000 in interest - you'll pay $26,000+ total for that original $10,000. But with a fixed $300/month payment, you'd be debt-free in about 4 years and pay roughly $4,000 in interest. The difference is staggering.