Credit Card Payoff & Interest Trap Calculator
ASIC Moneysmart 2.0% Minimum Payment Trap Warning • Fixed Payoff Acceleration • Interest Saved
Credit Card Details
Enter your balance and annual percentage rate (APR).
Reclaims 26.4 years of your financial life compared to paying only the bank's minimum.
ASIC Minimum vs Accelerated Payoff Comparison
| Repayment Strategy | Monthly Payment | Time to Payoff | Total Interest | Total Paid |
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The ASIC Moneysmart Minimum Payment Warning
Why the Minimum Payment is a Trap
Credit card minimum repayments are deliberately structured to decline as your balance drops (usually calculated as 2% to 2.5% of the remaining balance or $20). Because you pay almost exclusively interest in the early years and less principal each month, a $6,000 balance can take nearly 30 years to repay and cost over $14,000 in interest — more than double the original purchase amount.
The Power of Fixed Monthly Repayments
By picking a fixed amount (such as $250 or $300 a month) and sticking to it instead of letting the payment decrease as the balance drops, the proportion of your payment going directly to principal expands rapidly every single month. This accelerates your payoff from decades down to just 2 to 3 years.
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