What 'Minimum Payment' Actually Costs: A $5,000 Card Balance Run to Maturity at 2026 APRs

You have the balance, and the statement tells you what to send. That number — the minimum payment — is the whole article. It is not a suggestion and it is not a trap someone set for you; it is a formula from your contract, printed beside a warning the rulebook makes every issuer print. What it is, is a payment sized to keep the account open, not to close it. This article takes one $5,000 card at a dated 2026 rate, runs it to zero on nothing but that formula, month by month, and counts what the run costs. Then it runs the same balance at fixed payments, and counts the difference. The number, not the warning.

What the minimum payment is

Three shapes, and yours is written in your agreement. The card contract I pulled this week — Bank of America’s example BankAmericard agreement, the ©2026 edition still posted as the sample contract — defines it in one sentence, verbatim: the Total Minimum Payment Due is the past due amounts plus a Current Payment whose core is "(1) 1.00% of your New Balance Total, except for any new interest charges, any balances subject to a Custom Pay Plan, and any new Late Fee, (2) new interest charges, (3) any new Late Fee (the sum of (1) and (2) and (3) will be rounded down to the nearest dollar and will not be less than $35.00)." Read the shape, not the bank: a percentage of the balance, plus the month’s interest, with a dollar floor under it. Plenty of cards use 2 or 3 percent instead of 1 and a $25 floor instead of $35; the shape is the same.

The second shape is that percentage-and-floor rule with the interest left implicit: the greater of $25 or 3 percent of the new balance — where the new balance already includes this month’s interest. It is the version this site’s debt payoff calculator runs on its minimum-payment line, and it is the version every number below uses, so the two pages stay in the same model. The third is a flat floor alone — $25, no percentage. Hold that one; the trap section shows what it does.

And the sentence that must sit next to the number. Regulation Z — the Truth in Lending rule, 12 CFR 1026.7(b)(12), read this run from the official CFR edition — requires every card statement to carry, with a bold heading: “Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance” — followed by the issuer’s own estimate of the years and the total cost of exactly that, “based on the assumption that only minimum payments are made and no other amounts are added to the balance.” The same subparagraph requires the statement to print the payment that would finish the balance in 36 months, its total cost, and the savings. The issuers are federal-rule-required to print both numbers: the slow one and the fast one. This article is those two numbers, computed.

The card and the dated rate

One card. One balance. One rate, and the rate has a date on it, because card rates move.

• Balance: $5,000.00. No new charges, no fees, no cash advances — the statement’s own assumption.
• APR: 22.15 percent — the yearly cost of the debt, in percent, the rate — the Federal Reserve’s G.19 Consumer Credit release, the one dated September 8, 2026, for credit-card accounts being assessed interest. It is the same dated number the avalanche-vs-snowball article and the payoff calculator on this site already run, so nothing here needs a new rate source; if a card’s rate moves mid-schedule, the schedule gets re-run. The all-accounts average in the same release — 20.94 percent — gets its own run in the totals section, because the trap’s size is the rate’s size.
• The minimum: the statement-table shape — the greater of $25 or 3 percent of the new balance, the same rule the calculator page’s minimum line prints.

Month one, so you can see the machinery immediately. Interest first: $5,000 × 22.15% ÷ 12 = $92.29. New balance $5,092.29; 3 percent of it is $152.77, and the minimum is $152.77. Of that payment, $92.29 is this month’s interest and $60.48 — 39.6 cents of every dollar — actually touches the balance. That is not a rounding quip; it is the ratio the rest of the run is built from, and it is why the run is long.

The formula, shown, and the calculator

The whole model in one block, the same one the calculator page uses — same engine, same cents, same rounding:

each month, while the balance is above zero:
  interest  = balance x (APR / 12)                rounded to the cent, charged first
  minimum   = the greater of the $ floor or the
              percentage of the new balance       the new balance already has the interest in it
  balance   = balance + interest - the payment    the payment never exceeds the balance
a fixed payment replaces the second line: the same number every month, your number
repeat to zero — or to never, when the percentage is smaller than APR/12

The box runs the block: the minimum line and your fixed line on the same balance, side by side, to the cent. If it renders as an empty frame in an old browser, nothing is lost that the printed math below does not already carry — the noscript line inside it runs the worked example in ink.

The run, month by month

Minimums only, the $5,000 card at 22.15 percent, first payment October 2026. Interest, payment, what is left — rounded to the cent, exact to the engine above:

Read the payment column before the balance column, because that is the trap’s clock. The payment is not fixed; it is a percentage, so it shrinks as the balance shrinks. Month 1 sends $152.77. By September 2029 — three years in, still owing $3,226.33 — the minimum is under $100. In March 2039, twelve and a half years in, it hits the $25 floor and stays there — fifty straight payments of twenties — and the fifty-first, in May 2043, is $10.11.

The counted totals

Minimums only, to zero:

• 200 months — 16.7 years — to May 2043. Reg Z makes the issuer round that to whole years on the statement: about 17 years.
• $6,829.98 of interest on $5,000 of balance — 136.6 percent of the principal. The card costs more than the card.
• $11,829.98 total out. Ten years in, the run has sent $9,697.92 — nearly two of these cards — and still owes $1,160.83.

Three sensitivity lines, same engine:

• The all-accounts rate instead: $5,000 at the same release’s 20.94 percent runs 187 months and $5,986.88 — 13 months and $843 shorter than the assessed-interest card. The trap’s size is the rate’s size; that is the whole reason the rate carries a date.
• A different contract, same trap: the Bank of America 1 percent-plus-interest, $35-floor formula quoted above runs this card to zero in month 200 as well — but $7,866.54 of interest, $1,036.56 more than the 3 percent rule, because its early payments are smaller ($142.00 in month one; the box above runs the simpler percentage-or-floor shape, this run adds the interest on top of the 1 percent, exactly as the quoted clause reads). Two real formulas, same 200 months, a thousand dollars apart. The trap is the shape, not the clause.
• Against the calculator page: its card 1 — $6,000 of the same dated rate on the same engine — runs 215 months and $8,356.08, the numbers printed in its minimum-payment section. This card is $1,000 less debt and finishes 15 months sooner, for $1,526.10 less interest. Same model, checked against each other.

Why the minimum never outruns the rate

This is the part the warning sentence states and nobody shows. Divide the APR by twelve and you get the monthly race: at 22.15 percent, the card takes 1.8458 percent of the balance every month. The minimum pays interest, then passes the remainder to the balance — and the remainder is whatever the percentage part leaves.

• A 1 percent minimum at this rate is arithmetic in reverse: the percentage part is smaller than the monthly interest, so with nothing but the floor on top, the balance grows. On this $5,000 card, “the greater of $25 or 1 percent” without the interest component leaves $13,439.57 after ten years — and the growth accelerates from there.
• A flat $25, no percentage: interest outruns the payment above $1,354 of balance at 22.15 percent — the cliff the payoff calculator page prints — and this card starts nearly four times past it. Ten years of twenties: the balance is $34,085.35.
• A 3 percent minimum at 22.15 percent: the balance falls, but the payment falls with it. That is the deceleration in the table above. The first hundred months pay $5,370.60 of the interest — 78.6 percent of the run’s total — and retire $3,519.31 of the $5,000; the last hundred months pay $1,459.38 and retire the remaining $1,480.69. Half the balance is gone by month 57, and 55.9 percent of all the interest is already paid by then. The balance first drops under $1,000 in October 2037 — eleven years to the month after the first payment — and that last $1,000 still takes five and a half more years to die, fifty of those sixty-seven months on the $25 floor.

So the answer to what if I only make the minimum payment has a mechanism behind it: the minimum is sized from the balance, and the interest is sized from the balance, and at a 2026 card rate the interest is the bigger half of a shrinking payment. The card does not need you to borrow more for the balance to fall slowly. Slow is the design.

And the same division gives the number that matters: any payment above the monthly interest beats the rate. On this card that line is $92.29. Every dollar you send above it is a dollar of balance that stops existing — and, unlike the minimum, a dollar that never shrinks.

The fixed-payment run: the escape, counted

Same $5,000, same 22.15 percent, same engine — but the payment is yours instead of the formula’s, and it never moves:

Four readings, and the first one is the whole article.

• The same $152.77, held still, finishes in 51 months instead of 200 — December 2030 instead of May 2043, $2,740.25 of interest instead of $6,829.98. Not a dollar more than the first minimum ever asked for. The difference is not the amount; it is that the minimum shrinks and a plan does not. The one you finish is the one that counts.
• $110 a month — $42.77 less than the month-one minimum — still halves the run: 100 months exactly, $5,984.72. Below the interest line of $92.29 it would run uphill (the box says so when you type it); above it, even a payment smaller than the first minimum beats the formula, because it stays.
• $150 a month ends it in February 2031 and saves $3,995.71 of interest — and exactly the same $3,995.71 of total money out, $7,834.27 against $11,829.98, because the principal is $5,000 either way. Watch the two columns at the same dates: after twelve months the fixed line is only $88 ahead ($4,232.70 against $4,320.67 — this is not a fast race); by month 36 it is $1,139 ahead; at month 53 it is at zero while the minimum still owes $2,623.39.
• The escape payment that halves the trap has two numbers — halve the time and the line is $110; halve the interest (under $3,414.99) and the line is $137. The statement’s required 36-month column — $191.35 here, and the $4,941.88 of savings the rule makes the issuer print beside it — is the same arithmetic at the fast end.

Where the payment comes from

A fixed payment is a budget decision before it is a payoff decision. $150 a month is $57.71 of balance work from the very first month — money the household has to be holding on purpose, every month, for 53 months. On this site that is the 50/30/20 stress test — where the money for a payment like this gets found and defended — and the reserve that keeps a missed month from becoming a returned payment is sized in the emergency-fund work under budgeting. The payoff math does not care where the $150 comes from; your household does.

The decision

One card, counted: minimums-only is 200 months and $6,829.98 at the dated rate; the same first payment, held still, is 51 months and $2,740.25; $150 a month is 53 months and saves $3,995.71. The minimum is not a moral failing and it is not a secret — it is a formula printed next to a warning, on a statement you already get.

• Check your card’s actual formula, in the agreement, not in a memory: the percentage, the floor, whether the interest is inside or on top. Run the box above on it.
• Find your interest line — balance × APR ÷ 12. That number, not the minimum, is what a payment has to beat.
• Pick a payment that stays. The first minimum, held still, is usually the cheapest plan on this page.
• If it is more than one card, the list grows and the order becomes a question with an answer — avalanche vs snowball runs both orders on a real list, and the payoff calculator runs your list both ways at your budget. One card has no order; two do, and the rate is the number that decides.

List them, pick the order, start.