Is it important to pay more than the minimum amount due on my credit card balance?

Credit card lenders would prefer you not worry about how much debt will cost or how long it takes to repay. They want you to think about "minimum monthly payments" to keep your account current.

Paying off balances with the minimum now takes longer than ever because credit companies have downsized monthly minimum payments from between 3% to 5% to between 1.5% and 2% currently. Thus a credit card balance of $3000 with a 15% annual rate would take over 12 years to repay with a $45 minimum payment, and it would cost a whopping $3,481 in total interest payments.

Source: Understanding what credit costs. (1999, July). Consumer Reports, 14.

Written by:
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri-Columbia, University Outreach and Extension

Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri-Columbia, University Outreach & Extension

Last update: Tuesday, July 05, 2005