Credit Card Calculator: Fixed V's Minimum Payment

Our credit card calculator allows you to calculate the number of monthly payments that will be required to clear the outstanding payments necessary on your credit card if you are paying a regular fixed amount or the minimum amount allowed. Our Credit Card Calculator shows you how much money you are able to save by simply using a fixed monthly budget in order to repay your remaining credit card debt early.

  1. In this credit card calculation we used a credit card balance of 10000
  2. In this credit card calculation we used an annual interest rate of 16%
  3. Assuming that you make one credit card payment each month, adding up to twelve credit card payments a year, our calculations are based on this assumption. You are able to edit this and increase or decrease how many credit card payments you pay each year.
  4. We used a fixed monthly repayment of 250 for this credit card calculation
  5. We set the credit card monthly minimum payments at either 3% of the outstanding debt balance or a minimum payment of 5

You are able to review the results of a credit card calculation by simply:

  1. Using the drop down menu in order to view either the Minimum Payment schedule that's been calculated or the Fixed Payment Schedule.
  2. Clicking through the several pages of the credit card schedule.
Credit Card Calculator

Fixed Payment

Minimum Payment Details

whichever is the largest


Payment Schedule

 Page: 1   

Payment No. Payment Amount Interest Principal Balance

Credit Card Payments

A regular Credit Card payment is usually setup to take the minimum monthly repayment which would usually be a set percentage of your outstanding balance. The example that you will find below is using a credit card which has an outstanding balance of 10000 with a minimum repayment of 3% or 5, whichever is higher.

Minimum Payment Example: 10000 x 3% = 300 or 5 if higher.

With this in mind, if you choose to repay the minimum amount you could spend many years afterwards and end up paying a lot more interest. An effective way for budgeting a credit card and to repay it fast with a small amount of interest, is to repay it using the fixed repayment method.

Fixed V's Minimum Payments

The major perk to using a fixed repayment method is that you are able to plan ahead and use it to plan your household budget, meaning you will know the exact amount you will be required to leave in your bank account to be taken as the repayment.

Compared to that, if you choose to repay the minimum amount you may think that your debt will slowly decrease. This is something to keep in mind as it can often be incredibly wrong. Choosing to repay the minimum amount could sometimes cause your debt to increase instead of decrease.

Keep in mind that a credit card is actually a loan. You are spending money that you don't have and repaying it at a later date. When the minimum repayment amount is around 1% or lower, then you will notice that your credit card will only be reduced by a small amount each month, a very small amount. If you take a deeper look you will see that the majority of your monthly repayment is spent on the interest part of the payment rather than the actual debt. If you are repaying the debt at 1.5% then your monthly minimum payment is split around 50/50, half going towards repaying your debt and the other half going to paying the interest. If above 1.5% then you are repaying more than the overall amount due off than you are paying on interest.

Credit Card Budgeting

Living with debt isn't an easy task, and we understand that it is a financial challenge, often hard to overcome. It might seem impossible, but you are able to get free from the debt if you try. Take time to plan your financial, plan how you are going to spend the money you earn over the next year of your life (depending on how much debt you have racked up). After a few months of your financial plan taking place you'll begin to realise how much of a possibility of it is of your life one day being debt free, and hopefully very soon.

Before we mentioned the 1.5% and above figure, although most well-known credit card providers tend to use a minimum of 3%. With that in mind, when setting your budget use 5% instead. Using the same calculation above, let's substitute 5% in instead.

Fixed Payment Example: 10000 x 5% = 500

While 250 might seem like a large amount, if you are prepared to budget yourself and put this money aside each month then you will repay all of your debt multiple years faster than if you were to use the minimum repayment approach. However, if you find that 5% seems too high and you aren't able to budget as much as you would like, then try 4%. No matter what you do, make sure that all of your payments are fixed.

Check out our Snowball Debt Calculator which helps you understand how to accelerate your debt payoff

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