Paying only the minimum on a credit card can keep a modest balance outstanding for a decade or more. The cause is the formula used to set the minimum, not the interest rate alone.
The minimum is a shrinking percentage of a shrinking balance
Most issuers calculate the minimum as a small fraction of the outstanding balance, subject to a floor amount, with accrued interest and fees added on top.
Because it is proportional, the required payment falls as the balance falls. Each month the borrower is asked for less than the month before.
Repayment therefore decelerates exactly when progress would otherwise accelerate, which is the opposite of how a fixed instalment loan behaves.
Interest consumes most of an early minimum payment
The interest portion is charged on the full balance while the principal portion is only what remains after interest is covered.
On a balance at a typical card rate, the share of a minimum payment that reduces principal is small at the outset and only improves slowly.
The borrower is paying every month and watching the balance barely move, which is a common reason people conclude the payment is not working.
The floor amount is what eventually ends it
Without a fixed minimum floor, a proportional payment would approach zero and never fully clear the debt. Issuers set a small absolute floor to prevent that.
Once the proportional calculation falls below the floor, the payment stops shrinking and the remaining balance clears at a constant rate.
That tail can run for years on its own, which is why the final portion of a card balance often takes far longer than the borrower expects.
New spending resets the clock silently
Cards are revolving, so any new purchase is added to the same balance. The minimum recalculates upward and the repayment horizon extends.
A borrower making minimum payments while continuing to use the card can pay for years without the balance falling at all.
Because there is no scheduled end date, nothing in the account signals that this is happening. A fixed loan would show a term; a card shows none.
Paying a fixed amount changes the mathematics
Committing to a constant monthly payment rather than the calculated minimum removes the deceleration, because the payment no longer shrinks with the balance.
Every dollar above the interest charge reduces principal, and the reduced principal lowers next month's interest, so the effect compounds in the borrower's favour.
Statements are required to show how long repayment takes at the minimum and what a larger fixed payment would achieve, which is the clearest illustration available.