The Monet Blog · Debt & Credit
Minimum payments are designed to keep a balance alive. Here is the arithmetic, and the three changes that end it fastest.
By Sankha NagChoudhurySeptember 14, 20266 min read
Paying the minimum is not a payment plan; it is a way of staying current while the balance barely moves. Understanding how the charge is calculated makes the escape route obvious.
A typical minimum is a small percentage of the balance plus the interest and fees charged that month. As the balance falls the minimum falls with it, which stretches the payoff out for years.
Each one is small on its own; together they cut years off a balance without any extra income.
Pay every minimum, then send everything spare to one card. Highest rate first saves the most money; smallest balance first produces the first win sooner.
A cleared card fills up again without a buffer behind it. A small emergency fund is what makes the payoff permanent.
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