How Much Faster Can You Pay Off Your Credit Cards if You Add $10 to Your Monthly Minimum?

Paying off your credit cards can seem like an insurmountable task. If you have a lot of credit card debt, it may feel as if you will never get rid of it -- especially if you make monthly payments from your bank account each month and barely see your balance fall.

If this sounds like your situation, you may want to think about adding an extra $10 per month to the amount you send to your creditors. This may seem like an insignificant increase, but it actually can make a difference in how quickly you become debt-free. Here's why.

How does an extra $10 a month affect your credit card payoff efforts?

So, how much does an extra $10 monthly really impact your credit card payoff efforts?

The table below shows what a difference it could make to send in this extra payment out of your checking account each month, assuming you have a $5,000 credit card balance, a credit card interest rate of 21.19% (the current average rate as of August 2023), and a minimum payment equal to the lesser of 2% of your balance or $25.

An extra $10 per month cuts 36.2 years off the time you will be paying on your credit card, and it reduces the interest owed by around $17,745. It seems almost impossible to believe paying just $10 more can do that -- but it does.

That's because the minimum payment barely covers the credit card interest, so you don't make much progress on paying down your balance. If your balance barely declines, your debt gets paid off really slowly. But when you add just $10 a month to your payment, that entire amount can go toward reducing your principal. It's not a ton of cash, but it's enough to matter.

How much extra can you put toward your credit card bill each month?

Paying an extra $10 a month can make a huge impact, but the more extra money you can put toward your cards, the better. After all, if just $10 can make such a huge impact, $20 or $50 or $100 will have an even more powerful effect.

If you want to become debt-free faster and get back tens of thousands of dollars that would be lost to interest, go through your budget today. Find cuts you can make -- even if they seem like small ones -- and redirect that money to your credit cards. This is especially helpful if you can cut a recurring cost -- like canceling a membership or online service you don't use and putting all that extra money toward your credit cards consistently every month.

It does require sacrifice to find extra money to pay above the minimums on your cards. But just think about it -- would you rather have an extra streaming service or lunch out, or would you rather be debt-free sooner and left with a lot more of your own money instead of putting it into a creditor's pocket?