Credit Card Payoff

Most US credit-card minimum payments are calculated as 1–3% of the balance or a flat $25–35, whichever is greater. On a $5,000 balance at 22% APR with a 2% minimum, the first month's minimum is $100 — but most of that ($91.67) goes to interest, leaving only $8.33 toward the principal. At that pace, the card takes more than 30 years to pay off and costs over $13,000 in interest.

Doubling the payment to $200/month on the same balance pays it off in about 32 months and costs about $1,500 in interest. Tripling it to $300/month takes about 19 months and costs about $850. The relationship is non-linear because the early payments break the compounding cycle that minimums are designed to perpetuate.

Card statements include a federally mandated 'months to pay off if you only pay the minimum' line. Read it once on each card you carry — it's usually the most motivating number on the page.

Avalanche method: list cards by interest rate, pay minimums on all, throw every extra dollar at the highest-rate card until it's gone, then move to the next. This is mathematically optimal — it pays off the total balance fastest and costs the least in interest.

Snowball method: list cards by balance, pay minimums on all, throw every extra dollar at the smallest balance until it's gone, then move to the next. This is psychologically optimal — early wins build momentum and behavioral research finds higher follow-through.

If you can stick to the plan, use avalanche. If you've abandoned debt-payoff plans before, use snowball. The best plan is the one you'll actually finish; the difference in total interest between the two methods is usually a few hundred dollars over a multi-year payoff, well worth the higher completion rate.

A balance-transfer card with a 0% intro APR for 18 months and a 3% transfer fee converts a high-rate balance into something predictable. On $5,000 transferred, the upfront fee is $150 — far less than the interest you'd pay on the original card during the same period.

The trap is what happens after the intro period. If you haven't paid the balance to zero by the end of month 18, the rate snaps back to 20%+ on the remaining balance. Set the monthly payment so the entire transferred balance is gone before the intro period ends — divide the balance plus fee by the number of intro months and pay at least that.

Don't put new charges on the balance-transfer card. Most cards apply payments to the lowest-rate balance first, which means new purchases sit at the regular APR while you pay down the 0% transfer. Use a separate card for spending, or pay cash, until the transferred balance is cleared.

Starting balance $7,500, APR 24% (typical for store cards and subprime credit cards in 2026). Minimum payment 2% of balance, floor $25 — so month one's minimum is $150.

Pay only the minimum and the math is brutal: it takes about 32 years to clear the balance and you pay about $14,800 in interest — nearly twice the original balance. The first 5 years, the balance only drops from $7,500 to ~$6,400 because almost all of each minimum payment is interest.

Bump the payment to a fixed $250/month: balance gone in about 41 months, total interest about $2,650. Push to $400/month: balance gone in about 22 months, total interest about $1,400. Going from $150 → $400 cuts the payoff time by 30+ years and saves over $13,000.

A 0% APR balance transfer with an 18-month intro and 3% fee ($225) would let you pay $7,725 ÷ 18 ≈ $429/month and clear the entire balance interest-free. Even at $250/month during the intro period, you'd save $1,500+ in interest compared to staying on the 24% card — provided you don't add new charges.