$1,000 Debt at 22.99% APR

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

Minimum payment result
6 yrs 5 mo
paying $25.00/month
Total interest (minimum)
$915.34
paid on top of the $1,000 you borrowed
Fixed 3-year payoff
$38.70/mo
clears the debt in exactly 36 months
Total interest (3-year)
$393.44
total cost to escape this debt in 3 years
$521.90
saved by paying $38.70/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 6 yrs 5 mo $915.34 $1,915.34
Fixed 3-year payoff $38.70 36 months $393.44 $1,393.44
The fix: Commit to $38.70/month — $13.70 more than the minimum. This clears the debt in 3 years and saves $521.90 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 22.99% 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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