Skip to main content

Understanding minimum payments

Updated

Students watch a video and answer questions to learn how long it takes to pay off a credit balance when making only minimum payments.

Big idea

The more you pay on your credit card bill each month, the less you will pay over time. 

Essential questions

  • What is a minimum monthly credit card payment?
  • How is a minimum monthly payment calculated?

Objectives

  • Learn how credit card companies calculate minimum monthly payments
  • Calculate how many months it takes to pay off a credit card balance when making only the minimum monthly payment  

What students will do

  • Find out what interest is and how credit card companies calculate it.
  • Consider how paying more than the minimum monthly payment affects the amount of time it takes to pay off a credit card balance.

Explore related resources