Cost of Minimum Card Payments Calculator

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.

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.