Credit card minimum payments are designed to keep you in debt for a long time. The more you pay each month, obviously, the quicker you’ll be debt-free. To put a timeline on it, check out this chart from Business Insider. It tells you how long it will take to pay off your debt, depending on how much you pay every month.
Image: Skye Gould/Business Insider
The chart also takes your interest rate into account. Generally, the higher your interest rate, the longer it will take to pay off your debt because not all of your payment goes toward the principal. Business Insider explains:
Say you have $5,000 in debt and you’re committed to paying just 3% — or $150 — of that debt every month. If your credit card charges an annual interest rate of 14%, it will take you 43 months (about 3.5 years) to wipe out your debt. But if you up your payment to 10%, you can pay it off in just under a year.
It’s interesting to see just how much your debt payoff goal can vary, depending on your rate and depending on how much you can afford to pay each month. For more detail, head to their full post at the link below.