Compare how long it takes to pay off a single card at the minimum payment versus a higher fixed payment, and how much extra interest the minimum payment actually costs.
Each month, interest accrues on the remaining balance at the APR divided by 12. A percent-based minimum payment is calculated on whatever the balance happens to be that month, so as the balance drops, so does the required payment, which means a shrinking amount is fighting an interest charge that barely moves. On a high-APR card with a 1-2% minimum, the vast majority of an early payment can go straight to interest, leaving very little to actually reduce what is owed.
A $5,000 balance at 24% APR, minimum payment of 3% of balance (floored at $25), takes 234 months, just over 19 years, and costs $8,886.95 in interest, nearly double the original balance. The same balance paid at a fixed $200 per month clears in 36 months, 3 years, and costs $2,000.56 in interest, a difference of about 16.5 years and roughly $6,886 saved. At a 2% minimum on this same card, the payment barely exceeds the interest charge each month and the balance effectively never clears, which is the trap in its purest form.
This assumes a constant APR and no new purchases added to the balance, which is rarely true in practice. It also assumes interest compounds monthly on the statement balance, a simplification of how issuers actually calculate daily periodic rates. Treat the output as a realistic order-of-magnitude comparison, not an exact statement-by-statement projection from your specific card issuer.
This calculator is for informational purposes only and is not financial advice. Actual card terms, compounding methods, and fees vary by issuer. Check your card agreement or speak with your issuer for exact figures.