How your credit card minimum payment is calculated
Key points
- Most issuers set the minimum as a small percentage of your balance (often 1% plus that month's interest and fees, or a flat 2%), with a dollar floor such as $25 to $40.
- The formula matters a lot. In our $3,000 example at 22% APR, a flat 2% minimum takes about 55 years to clear the debt, while a 1%-plus-interest minimum takes about 12 years.
- Federal rules require a "Minimum Payment Warning" on your statement showing how long paying only the minimum would take and what it would cost.
Your credit card minimum payment is usually the greater of a fixed dollar amount or a small slice of your balance, often 1% of the balance plus the month's interest and fees. Any past-due amount can be added on top, and if your balance is smaller than the floor, the minimum is simply the full balance.
The exact formula is in your cardmember agreement. Below we walk through the common formulas, run the numbers at several balances, and show how to read the warning box on your statement.
The three common formulas
Chase says the minimum is usually a percentage of your balance, typically between 1% and 3%, but that it varies by issuer and balance. Citi notes that issuers may use one or more methods. In practice, you'll usually see one of these:
1. A flat percentage of the balance
The minimum is a set share of your statement balance, with a dollar floor for small balances. Citi gives the example of a minimum that is the greater of 2% of the balance or $25: on a $700 balance, 2% is $14, so the minimum is $25.
minimum = greater of (2% × balance) or $252. A percentage plus interest and fees
The minimum is a smaller percentage of the balance plus everything charged that month in interest and fees. Chase says that in most cases it calculates the minimum as $40 or 1% of the statement balance plus interest and late fees, whichever is greater, and that if your balance is under $40, the minimum is the full balance.
minimum = greater of $40 or (1% × balance + interest + late fees)3. The greater of several tests
Some agreements compare several amounts and charge the largest. Discover's cardmember agreement (pricing as of June 2026) says the minimum is any past-due amount plus the greatest of $35, 2% of the new balance, or $20 plus interest charges, late fees and certain debt protection fees. It's rounded up to the nearest dollar and never more than the new balance.
minimum = past due + greatest of ($35, 2% × balance, $20 + interest + late fees)What else can be added to your minimum
- Past-due amounts. Citi and Capital One both say an amount past due can be added to your minimum.
- Over-limit amounts. Citi and Discover say an amount over your credit limit may also be added.
- A higher percentage after a missed payment. Capital One notes that after a missed payment, an issuer might calculate future minimums using a higher percentage of your balance.
Worked example: the same balance, three formulas
Here's what each formula would ask you to pay at four balances. We assume a 22% APR and estimate one month of interest as balance × 22% ÷ 12. Real statements use your actual daily balances, so your interest will differ slightly. Formula 2 here uses a $35 floor to keep the comparison generic; formula 3 follows the Discover structure described above.
| Balance | Month's interest | 2% or $25 | 1% + interest, $35 floor | Greatest of $35, 2%, or $20 + interest |
|---|---|---|---|---|
| $500 | $9.17 | $25.00 | $35.00 | $35 |
| $1,500 | $27.50 | $30.00 | $42.50 | $48 |
| $3,000 | $55.00 | $60.00 | $85.00 | $75 |
| $8,000 | $146.67 | $160.00 | $226.67 | $167 |
Step by step for the $3,000 row:
- Interest: $3,000 × 0.22 ÷ 12 = $55.00.
- Flat 2%: 2% × $3,000 = $60.00, which beats the $25 floor, so the minimum is $60.00.
- 1% plus interest: 1% × $3,000 = $30.00, plus $55.00 interest = $85.00, which beats the $35 floor.
- Greatest of three: $35, or 2% × $3,000 = $60, or $20 + $55 = $75. The largest is $75.
At small balances, the floor decides everything. At large balances, the percentage does. You can plug in your own balance, APR and formula in our minimum payment calculator.
Why the formula changes how long you're in debt
Look at the flat 2% formula above. At 22% APR, one month of interest is about 1.83% of the balance, so a 2% payment barely touches the principal. Paying only that minimum, with no new charges, $3,000 would take 662 months (about 55 years) to pay off, with $21,418.95 in interest.
A formula that always covers the month's interest plus 1% of the balance forces steady progress. With the $35 floor, the same $3,000 is paid off in 146 months (about 12 years), with $4,006.22 in interest. That's still expensive, but it ends.
| Paying only the minimum on $3,000 at 22% APR | Months to pay off | Total interest |
|---|---|---|
| 2% or $25 | 662 (about 55 years) | $21,418.95 |
| 1% + interest, $35 floor | 146 (about 12 years) | $4,006.22 |
| Greatest of $35, 2%, or $20 + interest | 138 (11.5 years) | $4,013.86 |
| Fixed $114.57 a month | 36 (3 years) | $1,124.57 |
This is why bank regulators pay attention to minimums. In 2003 guidance, federal banking agencies including the Federal Reserve said they expect lenders to require minimum payments that will amortize the current balance over a reasonable period of time. They called prolonged negative amortization, where minimums don't cover the finance charges and fees, a concern. If the APR rises above the percentage your minimum covers, for example 30% APR (2.5% a month) against a 2% minimum, a percentage-only payment would not keep up with interest without a floor or an interest add-on.
For a deeper look at the cost of staying on minimums, see our guide on what happens if you only pay the minimum.
How to read the minimum payment warning on your statement
Regulation Z, the federal rule that implements the Truth in Lending Act, requires most card statements to include a box headed "Minimum Payment Warning." It explains that if you make only the minimum payment each period, you will pay more in interest and it will take longer to pay off your balance. It must also show:
- How long it would take to pay off the statement balance making only minimum payments.
- The total cost of doing that.
- The estimated monthly payment to pay it off in 3 years, its total cost and the savings, unless an exception applies (for example, if the minimum would already pay the balance off in 3 years or less).
- A toll-free number for information about credit counseling.
The estimates assume you make only minimum payments, add no new charges, and your APR doesn't change. If your minimum wouldn't even cover the interest, the statement must instead warn that the balance will never be paid off.
Using our simplified numbers for the 1%-plus-interest formula, a statement for $3,000 at 22% might show roughly 12 years and $7,006 in total cost if you pay only the minimum, versus about $115 a month and $4,125 total to finish in 3 years, a savings of about $2,882. Your issuer's figures use its own formula and daily balance math, so they'll differ somewhat.
Where to find your card's formula
- Your cardmember agreement. Look for a section called "Minimum Payment" or "Minimum Payment Due." Capital One also points cardholders to their account's terms and conditions.
- Your monthly statement. It lists the minimum payment due and the due date next to the warning box.
- Your issuer's customer service. The number on the back of your card can confirm the formula and any past-due amount included.
Paying more than the minimum
Paying at least the minimum on time keeps your account current, and Citi notes it helps build a history of on-time payments. But because most formulas shrink as your balance falls, the minimum alone stretches repayment for years. One simple option is to keep paying the same dollar amount each month instead of letting the payment drop. Test a fixed payment in the credit card payoff calculator, or compare formulas side by side in the minimum payment calculator. If a high APR is the problem, our guide to how balance transfers work explains another route.
Sources
- Chase: How to calculate your minimum credit card payment
- Citi: How credit card minimum payments work
- Capital One: Credit card minimum payments, what to know
- Discover: Cardmember Agreement (pricing as of 06/30/26)
- CFPB: Regulation Z, 12 CFR 1026.7(b)(12), repayment disclosures
- CFPB: Regulation Z, Appendix M1, repayment disclosures
- Federal Reserve / FFIEC: Credit card account management and loss allowance guidance (2003)
Frequently asked questions
How is a credit card minimum payment calculated?
Most issuers use the greater of a dollar floor (often $25 to $40) or a percentage of your balance, either a flat 2% or 1% plus the month's interest and fees. Past-due and over-limit amounts can be added. Your cardmember agreement has the exact formula.
Why did my minimum payment go up?
Common reasons are a higher balance, more interest charged that month, a late fee, or a past-due amount added on. Capital One notes that after a missed payment, some issuers calculate future minimums with a higher percentage.
What if my balance is less than the minimum floor?
Then the minimum is usually the full balance. Chase, for example, says that if your balance is less than $40, your minimum payment is the total balance.
Does my statement show how long the minimum will take?
Yes, on most cards. Regulation Z requires a Minimum Payment Warning showing how long payoff would take paying only the minimum, the total cost, and, in most cases, the monthly payment to pay it off in 3 years.
