This equation is repeated monthly until the loan is paid off, with the minimum payment being either the percentage or dollar amount (whichever is higher).
Credit Card Minimum Payment DefinitionIn the wake of the Great Recession, many people are looking for ways to reorganize their finances. Most of them forgo professional help because they feel that it is too expensive and will only drive them farther into debt. However, many of these people do not take full advantage of the resources that are easily available to them online.
Minimum Payment CalculatorOne of the most helpful resources that is freely available online is the credit card minimum payment calculator. A minimum payment credit card calculator can tell you exactly how much money you must put towards a credit card account every month to pay off that account within a specified period of time.
The reason that an independent, third-party minimum payment calculator is a good idea for everyone is that credit card companies do not have your best interests at heart when they give you your minimum payment bill for the month. Often, these minimum payments are interest only payments. Even if you are paying off principal, the minimum payments are often set up so that you will not pay off your balance for an extremely long period of time.
Using a credit card minimum payment calculator will keep you from having to calculate the actual minimum payment that you have to pay in order to get rid of your debt entirely. You can make completely sure to pay off your balance within the period of time that you specify. It is absolutely essential to good debt management to create a time frame for yourself in which you pay down your debts.
Calculator InputsThe inputs on the credit card minimum payment calculator are placed in order for maximum efficiency.
These inputs are:
Balanced OwedInterest RateMinimum Payment as Percentage per MonthMinimum Payment as Total Dollar Amount per Month.Placing these inputs into the appropriate spaces and clicking the button that says “calculate” will provide you with the amount of payments that you have to make, the total amount of money that you will spend on the loan, and the amount of money that will be charged to you in interest.
With this information, you can make more informed decisions about how to oversee your total finances. The only reason to hire a debt professional is to give you the opportunity to lessen the amount of time and money that you will have to pay on a loan. If they cannot restructure your current finances to better your overall situation, then you know that they are not the debt management professional for you.
The right debt management professional will actually be able to use the statistics that you give them through the credit card minimum payment calculator, cross-reference those statistics with your current financial situation, and come up with a plan for you that will actually save you money in interest payments over the long term.
You can also use the statistics that you find for personal calculations as well. If you need to create a budget for yourself because you do not have the funds to hire outside help, the minimum payment calculator will be your best friend throughout the entire process. You can always count on the minimum payment calculator for purely objective results that you can use to create a time frame and a budget for yourself.
Check out some of our other credit card calculators like the Credit Card Balance Transfer Calculator or the Credit Card Debt Calculator!
How to Calculate Credit Card Minimum PaymentLet’s be honest – sometimes the best credit card minimum payment calculator is the one that is easy to use and doesn’t require us to even know what the credit card minimum payment formula is in the first place! But if you want to know the exact formula for calculating credit card minimum payment then please check out the “Formula” box above.