Frozen Minimum Calculator
If you normally pay the minimum amount due on your credit card each month, this calculator is for you. This calculator shows how much time and money you will save by freezing your monthly credit card payment at today's minimum payment level. As you pay off your balance, the minimum amount due decreases every month. By keeping your payment constant, and not decreasing it each month to match the minimum, you will save thousands of dollars in interest and cut years of the repayment period. This repayment method does not require you to pay any more each month than you already do. It's perfect for people on a limited budget. See the article, Freeze Your Minimum, for a further explanation of how it works.
We're assuming a $5000 account balance, a 17% APR interest rate, and a minimum payment that is either 3% of your balance or $15, whichever is greater.
If you pay only the minimum as indicated on your statement, your card will be paid off in June 2026. That date is 191 months or about 15 years away. By paying only the minimum, your $5000 balance will incur $4207.79 in finance charges. Altogether, your $5000 balance will cost you $9207.79 to repay. Your monthly payment will start out at $150 and will gradually decrease until your balance reaches $500, at which point your payment will be a constant $15.
But what if you freeze your monthly payment amount at $150, the current minimum? How will the picture change if you pay $150 every month until your card is paid off? For starters, your card will be paid off completely in June 2014. That day of rejoicing is 47 months or about 3 years away. This is 144 months sooner than if you had paid the minimum each month. By keeping your payment frozen at $150, your $5000 balance will now incur only $1814.79 in finance charges, a savings of $2393! Altogether, your $5000 balance will have cost you only $6814.79 to repay. Much better!
You may also be interested in trying some of our other free online financial calculators.
NOTE: We try our best to ensure accuracy. However it's a fact of life with any computer program that bugs and errors pop up from time to time. We do not warrant the accuracy of these calculators. These calculators are for educational use only.
