Cost of Minimum Card Payments Calculator NZ

This calculator reveals the lifetime cost of paying only the minimum on a credit card in New Zealand, showing how many years it takes to clear the balance and the total interest you hand over along the way. The minimum payment is designed to keep your account in good standing, not to clear your debt, and because it is usually just two to three percent of the balance, the great majority of each payment goes on interest while the balance barely shifts. At the double-digit rates most New Zealand cards charge, a balance paid at the minimum can take well over a decade to clear and cost more in interest than the original purchase. You enter your balance, the card's annual interest rate, the minimum payment percentage and the dollar floor below which the minimum will not drop, and the calculator simulates the payoff month by month, recalculating the shrinking minimum each time, to give the total months, years and interest. It then shows how a fixed payment above the minimum changes the picture, which is the single most effective escape from the trap. Use it as a wake-up call and a plan: seeing the real number is usually enough to motivate paying more than the minimum or shifting to a cheaper product.

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45.1 years
to clear the balance on minimum payments
Total interest$19,091
Total repaid$24,091
First payment$100

Assumes no new spending and the minimum is recalculated each month. Most NZ cards set the minimum at the greater of a percentage or a dollar floor. Estimate only.

How it works

Each month the calculator adds interest at the annual rate divided by 12, then takes a payment equal to the greater of the minimum percentage of the balance or the dollar floor. Because the payment falls as the balance falls, the payoff stretches out for years. It tallies the months and the total interest until the balance reaches zero.

Worked example

A 5,000 dollar balance at 19.95 percent with a 2 percent minimum and a 20 dollar floor starts with a 100 dollar payment, of which about 83 dollars is interest. Clearing it at the minimum takes decades and costs thousands in interest, far more than paying a fixed amount each month.

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Frequently asked questions

Why do minimum payments cost so much?

The minimum is usually only 2 to 3 percent of the balance, so most of it goes on interest and the balance barely moves. At typical credit card rates a balance can take well over a decade to clear and cost more in interest than the original debt.

What is the minimum payment on an NZ credit card?

Most New Zealand cards set the minimum at the greater of around 2 to 3 percent of the balance or a small dollar floor such as 10 or 20 dollars. Enter your card's terms to match it.

How do I get out of the trap?

Pay a fixed amount above the minimum each month, or move the balance to a lower-rate product. Even a small fixed payment dramatically cuts the time and interest, because more goes to the principal each month.