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The outrageous cost of minimum payments

If you're paying just the minimum monthly payment on your credit card, your hard-earned money is being sucked into a compound-interest sinkhole. While it's true that the situation has improved somewhat since credit-card issuers were required to boost the formulas they used to compute the minimum amount due, getting by with the smallest amount possible can doom you to years of payments while barely scratching the surface of the principal.

Not convinced? Try this interactive Bankrate calculator by inputting your credit-card balance, the interest rate and the minimum payment percentage. We'll give you the minimum payment amount, the bad news about how long it'll take you to pay it off and the amount of interest you'll pay. Or, you can choose a fixed payment amount and see how paying a higher amount can save you time and money.

The true cost of paying the minimum
  The true cost of paying the minimum
What is your credit card balance? (no commas) $
What is the interest rate on your credit card? *
How is your minimum payment calculated?
Your minimum payment: $
What fixed payment could you make each month? $
Select a payment schedule based on:
-- Posted: Nov. 1, 2006
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