How to Reduce Minimum Payments on Credit Cards

It is tempting to pay the minimum but it may end up trapping you long term.

It is tempting to pay the minimum but it may end up trapping you long term.

Credit card minimum payments are a trap that ensnares many card holders. They seem to make expensive purchases more affordable by breaking them down into smaller monthly payments. In the long run they are designed to keep you paying over the longest period of time possible so those purchases you made end up costing far more than they would have otherwise.

Pay your credit card bill as early as possible every month. By doing so, you reduce the principal and therefore the amount of money on which interest is calculated. For example, suppose you have a $1,000 balance and a $30 minimum payment. If you pay the minimum earlier in the month, it will be applied to your account, thereby reducing the overall balance. The next month's minimum payment will be based on that new lower balance and therefore will be lower as well.

Continue to pay early every month and the savings will be even greater. Since credit card interest is compounded daily, the lower the balance each day, the lower the interest paid for that month. You will see these changes reflected in your next month's statement and every statement after that.

Make payments that are larger than the minimum to reduce the overall account balance. Once the balance has dropped, the minimum payment due will drop as well. As long as you can afford to make larger payments, the strategy will provide you with relief from high monthly minimums while reducing your overall debt at the same time.

Add 25 percent over your minimum payment this month and it will drop each month that follows as a result. For example, suppose you have a $1,000 balance and a $30 minimum payment. It will take you 125 months and more than $1,300 to pay it off. If you pay just $10, or 25 percent, more than the minimum every month, you can pay it off in 36 months with just over $400 in interest paid.


  • If you are having trouble making the minimum payment on your credit card accounts, you may be able to request a period of zero interest that will allow you to pay down your balance so that the minimum is more manageable afterward. Call your credit card company to explain your situation. Ask for a financial hardship, unemployment or underemployment forbearance. If granted, this temporary stay can make all the difference in your credit health.


  • Don't run up credit card bills so that you are forced to make minimum payments.
  • Although there are ways to lower your monthly minimums, the best way to eliminate debt is not to charge more than you can afford to pay off every month. Even if the payments are low, the interest you pay is money wasted.

About the Author

Robert Morello has an extensive travel, marketing and business background. He graduated with a Bachelor of Arts from Columbia University in 2002 and has worked in travel as a guide, corporate senior marketing and product manager and travel consultant/expert. Morello is a professional writer and adjunct professor of travel and tourism.

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