When you receive your credit card statement each month, you'll see both the closing balance and a "minimum monthly repayment" amount. While the closing balance is everything you owe, the minimum repayment shows what you have to pay off the card by the due date in order to keep your account in good standing.
Only paying the minimum repayment will help you avoid late payment fees, but it could also take you years to pay off your credit card and it can lead to ongoing credit card debt, interest charges and other risks. Use the calculator below to determine how long it will take you pay off your debt based on how much you're currently paying and how much you'd need to pay each month to meet your financial goal.
Credit card repayment and interest calculator
*Whilst every effort has been made to ensure the accuracy of this calculator, the results should only be used as an indication. They are neither a recommendation nor an eligibility test for any product and should not be construed as financial advice, investment advice or any other sort of advice.
How is credit card interest calculated?
There are two basic forms of interest, simple and compound, and credit cards accrue compound interest. There are also two parts to a credit card balance, the principal balance and the interest charges. Simple interest is charged as a fixed percentage on only the principal balance, so as you pay it down, regardless of how much you pay, you will pay less interest in the subsequent period. This assumes you are not making any new purchases to add to the principal balance.
Compound interest is charged as a fixed percentage on both the principal balance and the existing interest charges, so as you pay it down, if you're paying too little, you can end up paying more interest in the subsequent period. This is why it is critical to pay off as much of your statement balance as possible, to avoid paying interest on interest.
What is the minimum I need to pay on my credit card?
Your card issuer sets the minimum monthly repayment on your credit card. This amount varies between credit card issuers but is usually calculated as 2–3% (although it can sometimes can be up to 10%) of your closing balance, with a minimum dollar charge of around $20 to $30.
To give you an idea of these costs, here are the minimum monthly repayment requirements of some popular credit card issuers:
American Express credit cards. The higher of $30 or 2.5% of your closing balance
ANZ credit cards. The higher of $25 or 2% of the closing balance
CommBank credit cards. The higher of $25 or 2% of the closing balance
NAB credit cards. The higher of $25 or 2% of the closing balance
St.George credit cards. The higher of $10 or 2% of the closing balance
Westpac credit cards. The higher of $10 or 2% of the closing balance
Every time you get a credit card statement, the minimum repayment amount will be shown in dollars. This means you won't have to calculate the percentage owed if you carry a balance. Using the calculator above, if you input the minimum repayment amount into the 'Monthly payment' field, it will tell you how long it will take to pay off your balance. You can then change your payment amount to work towards your goal payoff time, or enter your payoff goal and it will tell you how much to pay each month (assuming you are not making new purchases).
What will happen if I just make the minimum credit card repayment?
If you just make the minimum monthly payment, you'll only pay off a small percentage of your credit card debt (leaving the majority of your balance to grow with interest). This means your credit card debt could cost you hundreds or thousands of dollars in interest, plus it could take years to pay back. If you continually carry a balance that takes up a large portion of your overall card limit, this can also negatively impact your credit score.
Instead of only paying the minimum repayment, you should always aim to either pay off your balance in full or try to clear as much of the debt you can each month to minimise your interest costs.
Maximising your repayment dollars
Let's say you have a $5,000 debt on a credit card with an interest rate of 15% p.a. and you want to work out the most efficient way to pay down the debt.
The minimum monthly payment on your latest credit card statement is $100 (the greater of $20 or 2% of the closing balance) but you calculate how much you can save if you start putting money aside and paying $250 off your card each month.
Minimum monthly repayments
Higher monthly repayments
Credit card debt
Monthly repayment amount
the greater of $20 or 2% of the closing balance
Total time to pay off debt
24 years 5 months
Total interest paid
Total amount saved
As you can see from the table, you can save a massive $6,456.05 by making higher repayments and pay your debt off in two years. However, if you were to continue to only make the minimum required payment, it would take more than 24 years to get out of debt. This clearly demonstrates why you should always try to pay more than the minimum monthly payment if possible.
What can I do if I'm struggling to repay my debt?
If you're struggling to pay off your credit card debt because of interest costs, you can consider transferring it to a card with 0% on balance transfers. This means you can repay your debt without paying any interest for a promotional period (such as 0% for 24 months). At the end of the introductory offer, the standard cash advance rate or interest rate will apply to your debt.
You'll still need to pay more than the minimum repayment to completely pay off your debt before the revert rate applies. For example, if you had a credit card debt of $2,000 and a card with 0% on balance transfers for 12 months, you'd need to pay $250 per month to clear the debt within a year and before you start accruing interest. You may be paying more upfront, but your overall interest costs will be less and you'll pay off your debt faster if you to pay more than the minimum requirement.
Want to know more about calculating credit card payments or minimum payments? We have answered some of the most commonly asked questions below. You can also use the form below to get in touch with us if you have any other questions.
It's up to you, but a credit card payment calculator can help you determine how long it will take you and how much it will cost you to repay your current credit card debt. If you're struggling to repay your debt or need to create a budget plan to pay down your credit card, you could find a credit card payment calculator useful.
You will usually be charged a late payment fee. Missing the minimum monthly payment will also leave a negative mark on your credit file, which could impact your likelihood of receiving approval for other loans in the future. If you fail to pay the minimum amount, your debt will also continue to grow with interest (making it potentially even more difficult to pay off in the future).
Your minimum repayment amount will be included in your monthly credit card statement. However, you can also see the card reviews on finder or read your card's product disclosure statement (PDS) to confirm what the exact minimum repayment amount is.
Yes, interest charges will still apply to the remainder of the balance you haven't paid off. So if your minimum repayment is 2%, you'll collect interest on the remaining 98% of your balance.
Yes, here are a few options you can consider depending on your circumstances:
If you have existing credit card debt. You may wish to move it to a new balance transfer credit card that offers an introductory low or 0% interest rate.
If you often carry a balance. Switching to a card with a low ongoing interest rate could help you save on interest charges when compared to cards with higher interest rates. But it would still be ideal to pay more than the minimum and avoid carrying a balance whenever possible.
Sally McMullen is Finder's credit cards and frequent flyer editor by day and a music maven by night. Her byline can be spotted on Yahoo Finance, Dynamic Business, Financy and Mamamia as well as Music Feeds and Rolling Stone.
* The credit card offers compared on this page are chosen from a range of credit
cards finder.com.au has access to track details from and is not representative
of all the products available in the market. Products are displayed in no particular
order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are
subject to our disclaimer.
You should consider seeking independent financial advice and consider your own
personal financial circumstances when comparing cards.
How likely would you be to recommend finder to a friend or colleague?
Very UnlikelyExtremely Likely
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of banks, insurers and product issuers. We value our editorial independence and follow editorial guidelines.
finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product or service.
Please note that the information published on our site should not be construed as personal advice and does not consider your personal needs and circumstances. While our site will provide you with factual information and general advice to help you make better decisions, it isn't a substitute for professional advice. You should consider whether the products or services featured on our site are appropriate for your needs. If you're unsure about anything, seek professional advice before you apply for any product or commit to any plan.
Products marked as 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money here.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan, we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.