How Much Will You Really Pay on a $30,000 Credit Card Debt?
Let’s make this simple to understand.
Debt Details:
Debt Type: Credit Card
Balance: $30,000
Annual Interest Rate: 29.99%
Example Payment: $900 per month
Step 1: How Interest Works
Every month, the credit card charges you interest. For the first month:
Interest = $30,000 × 2.5% ≈ $750
Payment = $900
Amount reducing your debt = $900 − $750 = $150
At the start, most of your payment goes to interest. The rest reduces the actual debt.
Step 2: What Happens as You Pay
As your balance goes down, two things happen:
The interest charged each month gets smaller (because interest is based on your remaining balance).
If you only pay the minimum payment, the credit card often lowers it automatically.
That means:
You might think paying the minimum is enough, but your debt could last many years.
You’ll pay much more in interest than your original $30,000.
Step 3: Example if You Pay $900 Every Month
Time to pay off debt: about 6 years and 1 month
Total paid: $65,700
Interest paid: $35,700
Step 4: What You Can Do
Pay more than the minimum each month to reduce your balance faster.
The faster you pay, the less interest you pay overall.
High-interest credit cards can double your debt if you only make minimum payments.