Credit card interest compounds daily. Your APR (Annual Percentage Rate) is divided by 365 to get a daily rate, which is applied to your balance every day.
Credit card minimum payments are typically 1–3% of your balance or $25 — whichever is greater. The trap: as your balance falls, your minimum payment falls too. This stretches repayment to 15–25 years and maximises the interest you pay. Card issuers designed minimums specifically to keep you in debt as long as possible. Never pay only the minimum if you can afford more.
| Balance | APR | Min Payment | Payoff Time | Total Interest | Total Paid |
|---|---|---|---|---|---|
| $2,000 | 22.4% | ~$50/mo | 12 years | $2,800 | $4,800 |
| $5,000 | 22.4% | ~$100/mo | 18 years | $7,700 | $12,700 |
| $10,000 | 22.4% | ~$200/mo | 22 years | $16,400 | $26,400 |
| $15,000 | 22.4% | ~$300/mo | 25 years | $25,800 | $40,800 |
Exact payoff date · Total interest · How much extra payments save — all free.
Open Credit Card Payoff Calculator →On a $5,000 balance at 22.4% APR:
| Monthly Payment | Payoff Time | Total Interest | Interest Saved |
|---|---|---|---|
| $100 (minimum) | 18 years | $7,700 | — |
| $150/mo | 4.3 years | $2,750 | $4,950 saved |
| $200/mo | 2.8 years | $1,630 | $6,070 saved |
| $300/mo | 1.7 years | $950 | $6,750 saved |
| $500/mo | 11 months | $520 | $7,180 saved |
Going from $100/month (minimum) to just $150/month cuts payoff from 18 years to 4.3 years and saves $4,950 in interest. That extra $50/month has a guaranteed annual return of 22.4% — one of the best "investments" available.
Every dollar you put toward a 22.4% APR credit card gives you a guaranteed, risk-free return of 22.4%. No stock, bond or savings account reliably matches this. If you have credit card debt, paying it off aggressively is almost always the highest-return financial move available to you — before investing, before saving for goals, before anything except an emergency fund and 401k employer match.
| Card Type | Average APR 2026 | Range |
|---|---|---|
| Rewards / Travel cards | 24.1% | 20–30% |
| Cash back cards | 22.8% | 19–27% |
| Student credit cards | 21.5% | 18–25% |
| Secured credit cards | 24.5% | 20–29% |
| Store / retail cards | 28.9% | 25–33% |
| 0% intro APR cards | 0% (12–21 months) | Then jumps to 20–28% |
Retail store credit cards (Target REDcard, Amazon Store Card, Macy's, etc.) typically charge 28–33% APR — the highest of any card type. They're marketed at checkout with "save 20% today" offers. That 20% discount disappears fast if you carry a balance even one month. Use store cards only if you pay the full balance every single month without exception.
At 22.4% APR paying the minimum (~$100/month), it takes approximately 18 years and costs $7,700 in interest. At $200/month it takes 2.8 years and costs $1,630 in interest. At $300/month it takes 1.7 years and costs $950. The single most important variable is how much above the minimum you pay each month. Use our credit card payoff calculator to get the exact timeline for your specific balance, APR and payment amount.
The average credit card APR in the US in 2026 is approximately 22.4% — near historic highs following the Federal Reserve's rate hiking cycle from 2022–2024. Rewards and travel cards average 24%+, while store cards average nearly 29%. The only cards with lower rates are balance transfer cards (0% promotional periods) and some credit union cards which may offer 12–15% to members with good credit.
Yes — if you have good credit and can qualify for a 0% balance transfer card, this is one of the most effective debt payoff strategies. Moving a $8,000 balance from 22.4% to 0% for 18 months saves approximately $2,800 in interest — even after a 3% transfer fee ($240). The critical rule: pay off the entire balance before the promotional period ends. After that, the rate typically jumps to 20–28%.
No — paying more than the minimum never hurts your credit score. It helps it. Paying down your balance reduces your credit utilization ratio (balance ÷ credit limit), which is the second most important credit score factor after payment history. Bringing utilization from 80% to below 30% can improve your credit score by 50–100 points. Pay as much as you can afford above the minimum every month.
Paying only the minimum keeps you in debt for 15–25 years on typical balances and means you pay back 2–3x the original amount in total. Your minimum payment mostly covers interest — very little goes to the principal. For example, on a $5,000 balance at 22.4%, the first $100 minimum payment covers $93 in interest and only $7 of principal. It would take 18 years to pay off this way, costing $7,700 in interest on top of the $5,000 borrowed.