The Shocking Math: Here's Why You Shouldn't Make Minimum Payments on a $10,000 Credit Card Balance

One of the most important debt relief facts to know is that credit cards are designed to trap you in debt. 

Credit cards have very high interest rates and very low minimum payments. If you borrow money and take years to pay it back, you help the credit card company make more money.  

You may avoid falling into this trap if you understand why you shouldn’t pay only the minimum balance on your credit card. The fact is that when you pay the minimum only, the majority of your payment goes to interest. You only reduce your balance—or your principal—by a very small amount.

This comes at a big cost in time and money. Let's run the numbers on how much a $10,000 credit card balance could cost you if you pay only the minimum due. 

How Much Will a $10,000 Balance Cost if You Pay Only the Minimum Due?

According to the Federal Reserve Bank of St. Louis, the average credit card interest rate was 21.37% in February 2025. 

If your minimum payment equals 1.5% of your balance, and you owe $10,000 at that average rate, the shocking total amount you would end up paying for your $10,000 credit card balance is $121,599. 

Put another way, that means you’d pay $121,599 for $10,000 worth of transactions. 

Even with a 2% minimum payment, you would still take more than 30 years to become debt-free, and would ultimately repay $54,533.78. 

That is a lot of money in added costs, and many years of your life spent paying on your credit card debt. 

What Should You Do if You're Only Paying the Minimum?

No one wants to pay hundreds of thousands of dollars to get rid of $10,000 in credit card debt. And no one wants to be in debt for decades. So, paying only the minimums on a $10,000 balance isn't the approach you want to take if you can help it. 

There are a number of options to help you get out of debt faster. Consider the following possible solutions. 

Pay extra on your debt

If possible—and it isn’t always easy—making extra payments on your debt is a great way to pay it off much faster. Even a small extra payment can make a big difference. That's because the entirety of the extra amount will go toward reducing your balance, not just paying interest. 

You can try out some apps for getting out of debt to help come up with a plan, or you can adopt an approach made popular by finance expert Dave Ramsey. Ramsey suggests starting with your smallest credit card balance and making extra payments on that card. After you've paid off your smallest debt, add its payment to whatever you were paying on the next smallest loan balance.

Ideally, you pay at least a little bit extra on your debt each month. If you can't, then when you receive a windfall or you have some extra money left over at the end of the month, use that amount. Every little bit helps, and each time you make an extra payment, your balance gets smaller—so your interest cost also goes down a little, too. 

Refinance your debt

Another option to pay off your debt faster and for less money is refinancing, using a loan with a cheaper interest rate. If you take out a debt consolidation loan, you use the new loan to pay off one or more existing credit cards. You simplify the repayment process, and have just one payment to make instead of multiple payments.

If you choose a fixed-rate loan, you have a monthly payment that does not change over time and a set payoff schedule such as three, five, or eight years. That way, you’ll know your interest costs exactly, as well as when you'll be debt-free.

Many debt consolidation loans offer repayment terms from one year to 10 years. The longer your payoff period, the more interest and total costs you pay over time. A shorter payoff timeline means you'll be out of debt faster and pay less over time, but your payments will be higher. 

Explore Debt Settlement Options 

If you can’t afford extra payments and have $10,000 or more in credit card and other unsecured debt, you may want to look into debt settlement. Debt settlement involves negotiating with creditors and getting them to agree to accepting less than the full amount due on your cards. 

You usually have to stop making payments to your creditors for them to agree to this. This means your credit score takes a hit. But you can put the money you were paying your creditors into a savings account to build up a lump sum you then use to pay the amount they agree to. 

A debt settlement company can help you negotiate a deal with your creditors and manage the process of saving up a lump sum payment. Once you've agreed to a deal with your creditors, you pay them the amount you agreed on, and the rest of your balance is forgiven. 

Debt settlement can often be the best option, even if it does hurt your credit score for a little while. That’s because you can climb out of debt and rebuild your credit once you've paid what you owe. 

Explore debt resolution programs to learn more about whether this or another option could help you get relief from credit card debt. It can be much better than being in debt for decades.