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Minimum Payments Cause Maximum Financial Pain

Making the minimum monthly payment on your credit card will eventually pay off the balance.

But it will take a long time -- and it will cost you. In some cases, in fact, the interest payments can add up to more than what you originally owed.

The minimum payment on credit cards is often just enough to cover the interest and financing charges for the month, with only a little extra to pay down the balance. The more slowly your balance drops, the more interest you pay over time.

Worse, because credit-card companies don't have to be clear about how they calculate the minimum payments (unlike the upfront disclosure requirements for rates and fees), consumers are often left without enough information to make responsible choices about their debt.

So how long will it take to pay off your credit card if you make only your minimum payments? Use the Credit Card Minimum Payment Calculator from to find out.

All you need to enter is your credit-card balance, the interest rate you are paying on your balance and the minimum payment (as a percentage) that your credit-card company requires you to pay each month.

Say that you put a midwinter vacation on plastic, resulting in a $3,000 balance. You pay 15% interest on your balance, and are making all of your required monthly minimum payments of 2% (or $60).

So how long would it take you to pay off that trip? It would take 26 years and four months to pay it off -- and along the way you would pay another $4,456.43 in interest.
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