Paying the Minimum, Priced: Clearing Time and Total Interest on a Card Balance Paid at the Minimum Versus a Fixed Sum

The minimum payment on a credit card statement is presented as an amount due; it functions as an anchor, and a costly one. This paper computes, exactly, the fate of a USD 3200 balance at 24.9% APR with no new spending. Paying the stated minimum each month (interest plus 1% of balance, floor USD 25) takes 192 months to clear and costs USD 5507.32 in interest — more than half the original balance again. Paying a fixed USD 100 a month clears it in 54 months at USD 2110.56 interest; USD 150 a month takes 29 months at USD 1070.04. Merely fixing the payment at the first month's minimum (USD 98.40) and never letting it fall clears the balance in 55 months and saves USD 5507 minus the fixed path's USD 2182.19 of interest. The minimum is not a repayment plan; it is the price of the balance's maximum permitted lifetime. The study is computed from stated rules, not measured. SIMULATED, NOT MEASURED.