Paying the Minimum on a Credit Card: What It Costs Over the Life of the Balance

What does paying only the minimum cost on a $5,000 credit card balance at 22.15%, the Federal Reserve’s second-quarter 2026 rate for commercial-bank card accounts assessed interest? Under a minimum of 1% of the balance plus interest, with a $40 floor and nothing new charged, it takes 182 payments totalling $12,395.77, and $7,395.77 of that is interest.

How 1% plus interest sets the first payment at $143.21

Card issuers set their own minimum payment formulas, and 20 of 21 surveyed issuers describe theirs in publicly available agreements, according to the Consumer Financial Protection Bureau’s December 2025 report to Congress on the card market. The Bureau found that minimum payment policies “can vary across issuers and across card products by the same issuer.” Among the issuers in its agreement review, most set the percentage at 1 percent of the balance and typically added finance charges and fees on top. The most common dollar floor at the time of that 2025 review was $40, up $15 since 2015.

I built the formula for this case from those most common terms, which makes it an assumption. Each month the minimum is the greater of $40 or 1% of the statement balance plus that month’s interest, capped at whatever is owed. I set the starting balance at a round $5,000 for the example, and nothing new goes on the card for the whole run. The rate is 22.15%, the second-quarter 2026 figure for commercial banks on card accounts assessed interest in the Federal Reserve’s G.19 release of September 8, 2026, where the quarter is marked revised. Divided by twelve, with the rate held fixed and no fees added, 22.15% brings $92.29 of interest in month 1 and a statement balance of $5,092.29. The minimum is 1% of that statement, $50.92, plus the $92.29 of interest, for a first payment of $143.21.

Why 125 straight payments go about 64% to interest

Because the formula passes each month’s interest through in full and adds 1% of the balance on top, the split of every formula payment depends on the rate alone. At 22.15%, about 64 cents of each dollar paid goes to interest, and the share holds there from month 1 through month 125. The principal portion falls with the balance, from $50.92 in month 1 to $45.50 in month 12. The balance therefore shrinks by about 1.02% of itself each month, and it first drops below half, to $2,492.65, in month 68.

The minimum shrinks by the same 1.02% a month, and that shared shrinkage is what flattens the payoff curve. The payment falls below $100 in month 37 and reaches $72.13 in month 68, roughly half the first payment. By month 120 the minimum is $42.36, and ten years of payments have sent $6,408.99 to interest against $3,536.21 of principal.

Month	Balance before interest	Interest charged	Minimum paid	Balance after payment	Interest paid to date
1	$5,000.00	$92.29	$143.21	$4,949.08	$92.29
12	$4,467.53	$82.46	$127.96	$4,422.03	$1,047.51
37	$3,458.79	$63.84	$99.07	$3,423.56	$2,857.13
68	$2,518.30	$46.48	$72.13	$2,492.65	$4,544.31
120	$1,478.85	$27.30	$42.36	$1,463.79	$6,408.99
125	$1,405.05	$25.93	$40.24	$1,390.74	$6,541.35
126	$1,390.74	$25.67	$40.00	$1,376.41	$6,567.02
150	$962.91	$17.77	$40.00	$940.68	$7,091.29
170	$431.11	$7.96	$40.00	$399.07	$7,349.68
181	$44.25	$0.82	$40.00	$5.07	$7,395.68
182	$5.07	$0.09	$5.16	$0.00	$7,395.77
Starting balance of $5,000 set for the example. APR 22.15%: Federal Reserve G.19 (September 8, 2026 release), commercial banks, credit card accounts assessed interest, 2026 Q2, held fixed for all 182 months. Monthly interest at APR/12 on the balance, rounded to the cent. Minimum: the greater of $40 or 1% of the statement balance plus that month’s interest, capped at the statement balance. No new charges, no fees. Months 1-125 use the 1% formula; from month 126 the $40 floor applies until the capped final payment.

Where the $40 floor takes over for the last 57 payments

In month 126 the formula produces $39.83, so the $40 floor binds for the first time, on an opening balance of $1,390.74. By then, ten years and five months of payments have retired $3,609.26 of the original $5,000. From then on the payment holds still while the interest keeps falling, so a larger slice of each $40 goes to principal every month. The interest share of the payment slides from 64.2% in month 126 to 19.9% by month 170.

The tail runs 57 payments and adds $854.42 of interest, about 12% of the whole interest bill. It ends in month 182, fifteen years and one month after the first statement, with a final payment of $5.16 that clears the last $5.07 of principal and nine cents of interest.

The schedule follows one minimum payment formula built for this example; your issuer’s own formula is set out in your cardholder agreement or on your statement, and the repayment estimate on your monthly statement, where one appears, is the figure for your account.