The minimum payment on a $5,000 credit card balance is at least $50, plus any fees, interest, and past-due amounts, if applicable. If you were late making a payment for the previous billing period, the credit card company may also add a late fee on top of your standard minimum payment. The exact formula your credit card’s issuer uses to calculate minimum payments is available in the card’s terms and conditions.
Minimum Payment on a $5,000 Credit Card Balance by Issuer
Note: Amounts above do not include interest and fees, which may be applied.
Key Things to Know About Credit Card Minimum Payments
The minimum payment is the smallest amount you’re required to pay by the due date for your account to be in good standing.
Late or missed payments will not only raise your minimum payment amount, but they can also cause significant damage to your credit score.
Your minimum payment will be listed on your monthly credit card statement and online account summary.
Credit card issuers are required by law to publish a chart on your credit card statement that projects how long it will take you to pay off your credit card balance just by making the minimum payment, and how much that will cost you in interest charges.
How much you owe can also determine your minimum payment on a 0% APR credit card. The 1% or 2% rate usually applies if you have a sizeable balance, generally $1,000 or more. If your balance is less than the $1,000, you’ll pay a fixed floor rate, usually around $25 for minimum payments. The fixed rate varies by card. If you have a very small balance, less than $25, for example, your minimum payment will be the full balance.
There are other factors that can affect the minimum payment on a 0% APR credit card. If you pay late or exceed your credit limit, for example, your minimum payment will be adjusted. It will include any unpaid minimum payment, amount over the credit limit and related fees. If these occur during the 0% APR period, an issuer may also cancel the 0% interest rate and begin charging the regular APR.
Here is what you should know about the minimum payment on 0% APR credit card:
A minimum credit card payment is the lowest amount you’re obligated to pay each billing cycle in order to keep your account current.
Most major credit card issuers require a minimum payment equal to 1% of the total balance. Discover charges 2%.
When a 0% APR period expires, minimum payments will increase to include any interest charges added to the total balance since your last billing cycle.
You can find your minimum payment on your credit card statement. It is also available on your online account or in the introductory pamphlet included with your new card. You can also call customer service at the number on the back of your card to inquire.
Minimum payments can be determined by how much you owe. The 1% - 2% rate usually applies to higher balances ($1,000 and more). A minimum payment floor (usually around $25) often applies to balances less than $1,000.
Usually, if you have a balance of less than $25, the full balance is the minimum payment.
An issuer may also cancel the 0% interest rate and begin charging the regular APR if you pay late, exceed your credit limit or fail to make the minimum payment. Your minimum payment will be adjusted to include any outstanding minimum payment, over limit amounts or any related fees.
Don’t assume that a 0% APR means you don’t have to pay anything at all. You are required to pay the minimum every month; you just won’t owe interest during the 0% period. And you should always try to pay significantly more than the minimum amount due on a 0% APR credit card. You want to pay off the entire debt before the introductory rate expires and the regular APR kicks in. Any missed payments or payments less than the minimum amount will likely lead to the 0% APR being cancelled.
If you’re transferring a balance or financing a big purchase, divide the balance by the number of months the 0% promotion lasts. This will help you get a rough estimate of how much you should pay each month. Better still, divide the balance by one less month than you have on your promotion to make absolutely sure no balance remains at the end.
The average monthly credit card bill is a minimum payment of $110.50, based on the average American credit card balance of $5,525 and the average minimum payment percentage of 2%. It would take over 6 years of minimum payments for the average person to pay off their total credit card bill – assuming there are no new purchases – and it would cost roughly $3,017 in interest. That assumes the average APR on all existing credit card accounts: … read full answer14.54%.
Each person’s monthly credit card bill is determined by a number of factors, such as the interest rate, average daily balance, and billing cycle. Not every credit card issuer calculates interest the same way. However, every credit card issuer is required to state how they calculate interest in the credit card’s terms.
Stats about the average monthly credit card bill:
Average Minimum Payment Due: $110.50
Average Individual Credit Card Debt: $5,525
Average Household Credit Card Debt: $8,006
Average Annual Percentage Rate: 14.54% (V)
It’s a good idea to pay your monthly credit card bill in full, whenever possible because interest tends to sneak up when balances are carried from month to month. People get in the habit of paying their minimum payment and don’t realize how much of the payment is going to interest. It’s good to note that payments above the minimum for general consumer credit cards must be applied to the principal balance – not interest – by law.
Read your card’s terms to see how the issuer calculates interest. Also, you can look at your monthly statement to see how long it will take to pay off the balance if you only make the minimum payment, and how much you need to pay each month to pay off the balance in three years.
Plus, plugging your own debt values into a credit card payoff calculator will tell you how long it would take to pay off the full balance with different payment amounts, how much interest you’d end up paying in the end, and how much you could save with bigger payments. If you can pay more than the minimum on your credit card debt, you’ll save a lot of money.
In order to pay off $5,000 in credit card debt within 36 months, you need to pay $181 per month, assuming an APR of 18%. While you would incur $1,519 in interest charges during that time, you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.… read full answer
The average length of a 0% APR balance transfer intro period is 13 months, according to WalletHub’s Credit Card Landscape Report, and the average balance transfer fee is 2.44% of the transferred amount. Below, you can see how much you could save while paying off $5,000 over different time frames, assuming a 12-month 0% APR period, a 3% balance transfer fee, and an 18% regular APR.
Paying Off $5,000 with a 0% APR Balance Transfer Card
Months to Payoff
Total Interest Paid
Total Savings vs. Regular Card
Of course, these aren’t the only timelines that you could commit to with $5,000 in debt. To price out more options, try WalletHub’s debt payoff calculator. This calculator can also help you decide if transferring the $5,000 in debt to a 0% APR balance transfer credit card would save you money.
Getting a 0% APR credit card isn’t the only way to pay off $5,000 in debt. In fact, there are many options to consider, each suited for slightly different situations.
Ways to Pay Off $5,000 in Credit Card Debt
0% APR Credit Card
Debt Management Plan
0% APR Credit Card
0% APR credit cards allow cardholders to avoid interest while paying down their debts. These cards can offer 0% introductory periods on new purchases or balance transfers for up to 20 months.
Keep in mind, however, that you may pay a fee for balance transfers, usually around 3% of the transferred amount. Also, if you decide to transfer your debt to one of these credit cards, do your best to pay it off before the typically-high regular interest rate kicks in.
Personal loans can be used to pay off $5,000 in credit card debt, assuming you can qualify for a big enough loan with a lower interest rate than your current credit card interest rate. This depends heavily on your creditworthiness.
Debt settlement is when the debtor negotiates with the creditor to pay a lump-sum that covers less than the total amount of the debt. In return, the creditor will forgive part of the debt, as well as other outstanding fees. This option is good for people who have enough money to make a large payment all at once. When taking this route, just be careful not to overextend yourself financially, or you’ll likely just end up back in debt.
Debt Management Plan
Debt management plans allow the cardholder and the lender to amend the original payment agreement by lengthening the repayment term, lowering the interest rate, and perhaps even waiving fees. Each of these modifications is meant to make the repayment process more manageable for the cardholder. Keep in mind, though, that cardholders are still expected to pay the full $5,000 with these plans.
Bankruptcy should only be used as a last resort. While declaring bankruptcy may help you clear your debt, it will also damage your credit score for years.
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