$1,000 Debt at 20.99% APR

Here is exactly what minimum payments cost you — and a clear path out.

Minimum payment result
5 yrs 10 mo
paying $25.00/month
Total interest (minimum)
$734.24
paid on top of the $1,000 you borrowed
Fixed 3-year payoff
$37.67/mo
clears the debt in exactly 36 months
Total interest (3-year)
$356.12
total cost to escape this debt in 3 years
$378.12
saved by paying $37.67/month instead of $25.00/month

Payoff Strategy Comparison

Strategy Monthly Payment Time to Pay Off Total Interest Total Paid
Minimum payments only $25.00 5 yrs 10 mo $734.24 $1,734.24
Fixed 3-year payoff $37.67 36 months $356.12 $1,356.12
The fix: Commit to $37.67/month — $12.67 more than the minimum. This clears the debt in 3 years and saves $378.12 in interest.

How Minimum Payments Are Calculated

Credit card issuers typically set the minimum at the greater of $25 or 2% of the outstanding balance. For $1,000 at 20.99% APR, the minimum is $25.00/month. While this keeps you current with the lender, most of each payment goes to interest — not principal.

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