Why minimum payments are a trap
Each month your card charges interest of roughly balance × APR ÷ 12 - about $147 on an $8,000 balance at 22%. A 2% minimum payment on that balance is only $160, so just $13 actually reduces what you owe. And because the minimum is recalculated as a percentage of the shrinking balance, it shrinks too, dragging the payoff out for decades while you pay several times the original balance in interest.
A fixed payment breaks the trap: instead of paying less as the balance falls, you keep paying the same amount, so an ever-larger share hits principal each month. The calculator simulates both paths month by month with the same APR, which is why the two curves in the chart diverge so sharply.
Frequently asked questions
Why does my balance barely move when I pay the minimum?
The minimum is usually just 1-3% of your balance, and most of it goes to that month's interest rather than principal. Worse, as the balance shrinks the minimum shrinks with it, so the payoff stretches out for decades while interest keeps compounding.
Avalanche or snowball - which payoff method is better?
The avalanche method pays the highest-APR debt first and saves the most interest mathematically. The snowball method pays the smallest balance first, giving quick wins that keep many people motivated. Either works - the best method is the one you stick with.
Do balance transfers hurt my credit score?
Usually only a little, temporarily. The hard inquiry and new account can cost a few points, but added credit limit lowers your utilization, which often helps within months. The real risk is running the old card back up while paying off the transfer.