See why minimum payments aren’t going to get you anywhere in 2023.

If you spent the past year struggling to pay off your credit card debt without making any headway, your minimum payment schedules may be to blame. Credit card companies don’t set minimum payments to help you pay off debt efficiently. In fact, they want to keep you in debt as long as possible because that means more profits for them. Don’t believe us? Enter your balance and interest rate in the free debt calculator below to see how much time and cash minimum credit card payments are costing you.

Credit Card Payoff Calculator


You’ll be debt-free by or years and ( payments)



Total amount you’ll pay (including interest): fixed

Did You Know?

Minimum payment schedules are not designed to pay off credit card balances quickly. In fact, they’re really designed to keep you in debt as long as possible.

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Why minimum payments don’t work

Minimum payments only pay off a small percentage of what you owe each month – usually about 2-5%. At the same time, you have high APR that’s eating up a big portion of each minimum payment you make.

At 15% APR, about half of every minimum payment gets used to cover accrued interest charges. At 20% APR, that jumps to about two-thirds of the payment. This is why you can make payments month after month, but you never seem to get anywhere – especially if you’re still making charges each month to the card.

So, if you really want to effectively pay off your credit card balances, you need to find solutions that are more effective than minimum payments.

What’s the best way to pay off credit cards?

There are a number of solutions that reduce or eliminate interest charges so you can pay off credit card balances faster. The finding the best solution to use in your situation depends on three things:

  1. How much you owe, in total
  2. Your credit score
  3. How much free cash flow you have available
Solution Recommended Credit Score Recommended Debt Amount Interest Rate Adjustment Monthly Payment Works for… Be aware of…
Credit Card Balance Transfer Excellent Less than $5,000 0% APR during introductory period Could be higher, as you work to eliminate the balance in the intro period Credit cards only Transfer fees (range from $3 to 3% of the balance transferred)
Personal Debt Consolidation Loan Good-Excellent Less than $25,000 Target 5-10% APR Can be less than what you pay now Credit cards, medical bills, unsecured loans, back taxes
Home Equity Loan Fair-Excellent Up to 80% of the equity available in your home Typically around 5% Can be less than what you pay now Credit cards, medical bills, back taxes, other financial goals Increased risk of foreclosure
HELOC Fair-Excellent Up to 80% of the equity available in your home Typically around 5% Interest-only for 10 years, then payments increase with principal + interest Credit cards, medical bills, back taxes, other financial goals Increased risk of foreclosure
Debt management program Any, including bad $10,000 and up (works for over $100K) Negotiated 0-11%, on average Total payments reduced by up to 30-50% Credit cards, medical bills, payday loans Freezes any accounts you include in the program
Debt settlement program Any, including bad Some (not all) programs limit to $100,000 n/a (interest charges do not apply) Monthly set aside; significantly less than other options Any debts already in collections Credit damage lasting seven years from the date of discharge

Here’s why a debt management program may be your best option…

Let’s be honest. Most people would rather solve debt problems on their own. But unfortunately, do-it-yourself doesn’t always work. Balance transfers and consolidation loans can effectively consolidate debt at a lower rate. But what they can’t do is help you balance your budget, so you stop charging. If you consolidate existing debt, then run up new balances, you make the situation worse instead of better.

If you work with a credit counseling agency to enroll in a debt management program, they help you create a balanced budget. At the same time, your creditors freeze any accounts you include in the program. This allows you to break your credit dependence, so you can stop charging and learn how to live without relying on credit to get by.

This option also won’t damage your credit when done correctly. Since the credit counseling team negotiates with creditors and they agree to the program, you build a positive credit history on all your accounts with every monthly payment you make. Since credit history is the biggest factor in calculating consumer credit scores, making debt management program payments on time is good for your credit.

That being said, if you’re already behind on many of your accounts, debt settlement can be a good option. In this case, you’ve probably already taken some damage to your credit. So, your goal is usually just to eliminate the debt as quickly as possible. Settlement can get you out of debt for a portion of what you owe.

Finally, most experts agree you should avoid home equity loans and HELOCs to pay off unsecured debt. If you default on these loans, you could lose your home to foreclosure. It’s typically not worth the increased risk to pay off your credit cards – especially when there are so many other solutions available.

How long should it take to pay off credit card balances?

A good rule of thumb is that any solution you use should be able to pay off your debt in 3-5 years. Solutions that take longer than that would mean that you’re still throwing money away on interest charges. If you play around with the credit card payoff calculator above, you can see the problem that arises with lengthy repayment plans, like minimum payments. At a certain point, the total interest charges actually become more than the original amount charged.

Let’s say you have a $2,000 credit card balance to pay off at 22% APR. On a standard 3% payment schedule, it takes almost 11 years to pay off the balance. The total interest charges are $2,299.67. So, you charged $2,000, but you end up paying more than double that amount to pay off your balances.

This shows why credit card debt is such a burden on your budget. People often think of credit cards like free money, but interest charges often eat up income that you needed to cover other things. As a result, you end up juggling bills and putting off necessary expenses like doctor’s visits and car repairs. High credit card balances could be the reason you’re having so much trouble making ends meet.