Minimum Payment
Definition
The smallest amount you can pay on a credit card and stay current. Usually 1-2% of balance or $25, whichever is higher. Paying minimum means you'll carry balance for years, paying tons of interest.
Why It Matters
Minimum payments keep you in debt. A $10,000 balance at 18% APR with $250 minimum payment takes 5+ years to pay off and costs $4,000+ in interest. Pay significantly more to escape the trap.
Example
$10,000 credit card balance at 18% APR. Minimum $200 per month payment: takes 73 months ($14,600 paid). Pay $400 per month: takes 30 months ($12,000 paid). Doubling payment saves $2,600 and 43 months of payments.
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Pulsafi definitions are sourced from primary regulatory and industry references. See our methodology and data sources.